DOW JONES NEWSWIRES
Take-Two Interactive Software Inc. (NASDAQ-NMS:TTWO) (TTWO) swung to a fiscal second-quarter net profit after a banner quarter that included the blockbuster release of "Grand Theft Auto IV."
"Take-Two's performance has exceeded expectations through the first half of fiscal 2008, clearly demonstrating the creative, operational and financial strength of our business," said Chairman Strauss Zelnick. The results easily topped expectations prompting Take-Two to substantially boost its fiscal year guidance.
The video game designer of reported net income for the quarter ended April 30 of $98.2 million, or $1.29 a share, compared with a year-earlier loss of $51.2 million, or 71 cents a share.
Excluding stock-based compensation, legal costs, and restructuring expenses, Take-Two recorded per-share earnings of $1.52, compared with a year-earlier loss of 41 cents.
Revenue more than doubled to $539.8 million.
The mean per-share earnings estimate of analysts polled by Thomson Reuters was $1.13 on revenue of $499 million.
"Take-Two is extremely well positioned in an industry that is experiencing explosive growth," said Chief Executive Ben Feder. "We believe that our exceptional creative talent, diverse range of hit products, and the proven global demand for our titles will be the drivers of increasing value over time."
Take-Two's gross margin climbed sharply to 41% from 22.3%.
Looking forward, the company now expects fiscal 2008 per-share earnings of $ 1.65 to $1.85 on revenue of $1.4 billion to $1.5 billion. The company had expected fiscal 2008 per-share earnings of $1.35 to $1.55 on revenue of $1.25 billion to $1.4 billion. Wall Street expected $1.52 on revenue of $1.41 billion.
For the fiscal third quarter, the company expects per-share earnings of 45 cents to 55 cents on revenue of $325 million to $375 million, compared with analysts' forecast of 32 cents on revenue of $322 million.
Electronic Arts Inc.'s (NASDAQ-NMS:ERTS) (ERTS) has continued to make month-to-month extensions of its $2 billion hostile takeover offer, which so far has garnered little response from Take-Two shareholders. Take-Two has said the tepid response validates management's opinion that the offer undervalues the company, pointing to recent achievements including "Grand Theft Auto IV's" record-breaking debut and a movie-development deal for "BioShock." The latest offer expires June 16.
Take-Two has had a good run over the past months. "Grand Theft Auto IV" debuted to stellar reviews and put up numbers Hollywood would be envious of: $ 500 million in sales in the first week, making it the biggest video game debut of all time. That performance exceeded the expectations of Wall Street analysts and helped to rally Take-Two shares to above the $27 level.
Take-Two's shares closed Thursday at $27.65, up $1.24 for the day. Shares recently changed hands at $27.38 in after-hours trading.
-By Andrew Edwards, Dow Jones Newswires; 201-938-5973; Andrew.Edwards@ dowjones.com
(END) Dow Jones Newswires 06-05-08 1621 Copyright (c) 2008 Dow Jones & Company, Inc.
