Take-Two Results Improve on ‘Grand Theft Auto V’ Demand
February, 3 2014
The Wall Street Journal/Ian Sherr
Results Easily Top Videogame Maker's Prior Guidance
Take-Two Interactive Software Inc. TTWO -1.46% dramatically increased its revenue and profit in its fiscal third quarter on continuing strong demand for "Grand Theft Auto V" and other titles.
Results easily topped the company's prior forecast, but its forecast for the current quarter falls below the current consensus views.
The New York videogame maker said its profits surged to $578.4 million, or $4.69 a share in the period ended Dec. 31, up from $71.4 million, or 66 cents a share a year earlier. Revenue jumped to $1.86 billion, from $415.8 million a year earlier.
Strauss Zelnick, Take-Two's chief executive, said the continued demand for the company's crime drama game, "Grand Theft Auto V," and its highly-regarded basketball title, "NBA 2K14," contributed to the rising returns.
In particular, he said sales of digital items over the Internet, such as in-game cash to spend on cars, have fared particularly well. "We're very, very encouraged," he said.
Take-Two released its latest entry in its "Grand Theft Auto" franchise in September, receiving critical acclaim. The title also tallied more than $1 billion in sales within its first three days on the market, making it one of the most successful videogame launches ever.
Excluding items such as stock-based compensation, Take-Two said earnings more than doubled to $1.70 a share, from 67 cents a share a year earlier. Adjusted revenue rose nearly 90% to $767.7 million, from $405 million a year earlier.
The company in October guided for earnings of $1.20 to $1.35 a share and revenue of $650 million to $700 million.
Looking ahead, Take-Two said it expected adjusted earnings for its fourth quarter to be between break-even and 10 cents a share. Revenue is expected to tally between $170 million to $200 million. Analysts are expecting adjusted earnings of 13 cents a share on revenue of $219.2 million.