Take-Two Profit Tops Street; Shares Up

(RTTNews) - Shares of video game publisher Take-Two Interactive Software Inc. (TTWO), gained over six percent in after-hours trade after its earnings for the fourth quarter trumped Wall Street estimates, reflecting impressive sales of its blockbuster game - "Grand Theft Auto V." Moving ahead, the company also detailed a strong outlook for the first quarter.

Nevertheless, on an reported basis, loss for the quarter widened sharply due largely to higher expenses. New York-based Take-Two's fourth-quarter loss widened to $242.8 million or $2.99 per share from $30.8 million or $0.40 per share last year.

Excluding items, adjusted earnings for the quarter rose to $54.3 million or $0.49 per share from $21.5 million or $0.21 per share a year ago. On average, 14 analysts polled by Thomson Reuters estimated earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the fourth quarter surged 54 percent to $300.1 million from $195.2 million last year. Adjusted revenues, which exclude effects of change in deferred revenues, jumped 83 percent to $427.7 million from $233.2 million in the prior year. Fifteen analysts had a consensus revenue estimate of $459 million for the quarter.

Take Two's revenues from digitally-delivered content for the quarter grew 66 percent year-over-year to $202.5 million, led by offerings from the Grand Theft Auto, NBA 2K, Evolve, Borderlands and WWE 2K series, representing 47 percent of its quarterly revenue.

Take-Two's business, like its peers Activision and Electronic Arts, has started shifting to digital downloads from the traditional disc-based video games. Gamers now spend money over internet to buy additional storyline, in-game currencies and other add-on contents.

Looking forward to the first quarter, the company expects adjusted earnings of $0.25 to $0.35 per share, on adjusted revenues of $325 million to $350 million. Analysts currently expect a loss of $0.02 per share on revenues of $197.7 million.

For the full year 2016, the company anticipates adjusted earnings in the range of $0.75 to $1.00 per share, on revenues of $1.3 billion to $1.4 billion. Analysts currently expect earnings of $1.29 per share on revenues of $1.52 billion for the year.

"Fiscal 2016 is off to a great start, highlighted by the April launch of Grand Theft Auto V for the PC, which has exceeded our expectations. Throughout the coming year, we will continue to execute our proven strategy of launching a select array of the highest-quality titles, led by new annual releases of NBA 2K and WWE 2K; Battleborn, a groundbreaking new intellectual property from Gearbox Software; and a soon-to-be announced new triple-A title from 2K," said CEO Strauss Zelnick.

The company also approved an increase to its share repurchase authorization up to 10 million shares.

TTWO closed Monday's regular trade at $24.20, down $0.49 or 1.98%, on the Nasdaq. The stock gained $1.61 or 6.65% in the after-hours trade.