Take-Two Results Top Estimates; Outlook Weak

(RTTNews) - Video-game publisher Take-Two Interactive Software, Inc. (TTWO) said Tuesday after the markets closed that it swung to a fourth quarter loss, as the company did not have any new releases during the quarter while the prior year quarter results benefited from the release of BioShock Infinite.

However, the company's quarterly earnings per share, excluding items, came in above analyst' expectations as did its adjusted revenue.

At the same time, the company forecast first quarter results well below analysts' current consensus estimates. The company also gave a downbeat earnings forecast for the current fiscal year.

Take-Two shares are currently losing 3.05% in after hours trading after closing the day's regular trading session at $20.63, down 4 cents. The shares trade in a 52-week range of $14.10 to $22.41.

For the fourth quarter ended March 31, 2014, the New York-based company reported a net loss of $30.8 million or $0.40 per share, compared to net income of $22.5 million or $0.24 per share for the year-ago quarter.

Excluding items, adjusted net income for the fourth quarter was $21.5 million or $0.21 per share, compared to $42.9 million or $0.38 per share in the prior year quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.10 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Revenue for the fourth quarter fell 35% to $195.21 million from $299.49 million a year earlier. Excluding deferral, adjusted revenue dropped 23% to $233.16 million from $303.13 million last year. Twenty analysts had a consensus revenue estimate of $202.51 million for the fourth quarter.

The largest contributors to fourth quarter revenue were NBA 2K14, Grand Theft Auto V, Grand Theft Auto Online, Borderlands 2 and BioShock Infinite.

Adjusted revenue from digitally-delivered content rose 51% year-over-year to $122.3 million in the fourth quarter, led by the Grand Theft Auto series, the NBA 2K franchise and offerings for Borderlands 2. Catalog sales accounted for $75.7 million of adjusted revenue.

"During fiscal 2014, Take-Two set new records for both our Company and the entertainment industry," said Strauss Zelnick, Chairman and CEO of Take-Two. "Rockstar Games' Grand Theft Auto V reached $1 billion in sales faster than any entertainment release in history, NBA 2K14 enjoyed the franchise's strongest launch, Borderlands 2 became 2K's top-selling title, and our digitally-delivered revenue grew to its highest level ever."

Looking forward to the first quarter, the company forecasts adjusted revenue of $120 million to $135 million and an adjusted loss of $0.35 to $0.25 per share. Analysts currently expect the company to report a loss of $0.16 per share on revenue of $209.65 million for the first quarter.

For the fiscal year 2015, the company forecasts adjusted revenue of $1.35 billion to $1.45 billion and adjusted earnings of $0.80 to $1.05 per share. Analysts currently expect the company to earn $1.04 per share on revenue of $1.39 billion for the fiscal year 2015.

Last week, another video-game publisher Electronic Arts Inc. (EA) reported higher fourth quarter profit that also beat analyst estimates, thanks largely to a more-than-expected growth in revenues reflecting strong sales of games played on new-gen consoles.

Also last week, Activision Blizzard Inc (ATVI), the world's largest video-game publisher, reported forecast-beating first quarter results on strong sales of Skylanders and Call of Duty franchises.