Take-Two Profit Surges, But Provides Weak Q4 Outlook

(RTTNews) - Video-game publisher Take-Two Interactive Software Inc. (TTWO) Monday reported a surge in third-quarter profit on robust demand for "Grand Theft Auto V", "NBA 2K14" and other titles. The results topped Wall Street estimates.

Moving forward, Take-Two provided a weak outlook for the fourth quarter, but again lifted its expectations for the full year 2014.

Commenting on the third-quarter performance, CEO Strauss Zelnick said, "Our results were driven by robust holiday demand for Grand Theft Auto V, the franchise record-breaking launch of NBA 2K14, the successful release of WWE 2K14, and strong growth in digitally-delivered revenues led by Grand Theft Auto Online."

Take-Two, based in New York, posted third-quarter net income of $578 million or $4.69 per share, compared with $71 million or $0.66 per share last year.

Excluding items, adjusted earnings for the quarter were $210.7 million or $1.70 per share, compared with $79 million or $0.67 per share a year ago.

On average, 20 analysts polled by Thomson Reuters estimated earnings of $1.37 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter spiked to $1.86 billion from $416 million in the prior year. On an adjusted basis, revenues jumped to $767.7 million from $405 million last year.

Analysts estimated revenues of $704.44 million for the quarter.

In September, Take-Two released its latest entry in its "Grand Theft Auto" franchise, and in the first three days alone, the title brought in sales of over $1 billion.

For the fourth quarter, Take-Two projects adjusted results between breakeven and and $0.10 per share and adjusted revenues of $170 million to $200 million. Analysts expect earnings of $0.13 per share on revenues of $219.23 million.

For fiscal 2014, Take-Two now expects adjusted earnings of $4.15 to $4.25 per share and adjusted revenues of $2.35 billion to $2.38. It earlier projected earnings of $3.50 to $3.75 per share and revenues of $2.20 billion to $2.30 billion.

Analysts expect earnings of $3.80 per share on revenues of $2.34 billion for 2014. In November, Take-Two bought all of the Icahn Group's stake in the company and the transaction entailed the resignation of Icahn Group designees from the Take-Two board.

Take-Two stock closed Monday at $18.90, down $0.28 or 1.46%, on a volume of 5.4 million shares on the Nasdaq. In after hours, the stock dropped $0.26 or 1.38% at 18.64. In the past year, the stock has traded in the range of $12.26 - $19.67.