Take-Two 2Q results crush expectations

Take-Two posts 2Q loss, but 'Grand Theft Auto' drives adjusted results way above expectations

Associated Press

NEW YORK (AP) -- Take-Two Interactive Software Inc. posted fiscal second-quarter results on Tuesday that sped past Wall Street's expectations, led by record-breaking sales of its latest "Grand Theft Auto" game.

The video game publisher also raised its full-year guidance again, and CEO Strauss Zelnick said he is "very optimistic" about the holiday season even though Take-Two's biggest quarter of the year is now behind it. Shares of the New York company rose 45 cents, or 2.5 percent, to $18.40 in after-hours trading.

Weighed down by higher costs and a drop in revenue, Take-Two booked a loss of $124.1 million, or $1.40 per share, in the three months that ended on Sept. 30. That compares with a loss of $12.5 million, or 15 cents per share, in the same period a year earlier. Revenue fell to $148.8 million from $273.1 million a year earlier.

However, Take-Two's adjusted results include revenue and related costs from games with online components or other elements that are not available when the title goes on sale. These can include extra downloadable content that video game companies often release well after the main game is sold. In this quarter's case, this meant "Grand Theft Auto V," which launched late in the quarter on Sept. 17. Sales surpassed $800 million in a single day. The online version, meanwhile, launched on Oct. 1, a day after the quarter ended. The game has sold 29 million units so far.

On an adjusted basis, which is more closely watched by Wall Street analysts, Take-Two earned $325.6 million, or $2.49 per share, on revenue of $1.27 billion in the latest quarter. On this basis, analysts had expected earnings of $1.70 per share on revenue of $947 million, according to a poll by FactSet.

Take-Two now expects adjusted full-year earnings of $3.50 to $3.75 per share on revenue of $2.20 billion to $2.30 billion. That's up from its forecast in July for fiscal 2014 earnings of $2.25 to $2.50 per share on revenue of $1.78 billion to $1.88 billion.

The stock had closed up 27 cents at $17.95 before the report. Shares are up 63 percent year to date.

Rates