Take-Two Interactive Software Inc. on Monday reported fiscal
first-quarter revenue that more than doubled thanks to a strong
performance from its most popular franchises, though the company's
profit fell short of Wall Street's expectations.
The videogame publisher, best known for its "Grand Theft Auto"
and "NBA 2K" franchises, said adjusted revenue surged to $366.4
million from $151.6 million in the year-earlier quarter. That was
more than the $351.4 million expected by analysts surveyed by
Thomson Reuters.
Revenue was driven higher by a handful of reliable franchises,
including "Grand Theft Auto," "Borderlands," and sports games tied
to WWE wrestling and NBA basketball, Take-Two said. A fifth
installment of GTA and an online version of the game were released
for PCs in the quarter, though the company didn't have any major
new games.
Take-Two swung to an adjusted profit of $34.2 million, or 31
cents a share, from a loss of $11.2 million a year ago. Analysts,
though, expected a bigger profit of 36 cents a share, according to
Thomson Reuters.
Shares of Take-Two, up 48% over the past year, fell 3.2% to
$29.95 in after-hours trading.
Like its competitors Electronic Arts Inc. and Activision
Blizzard Inc., Take Two has shifted its focus in recent years to
selling content delivered over the Internet, including full-game
downloads, expansion packs, subscriptions and virtual goods.
Adjusted digital revenues totaled $254 million, more than
two-thirds of overall adjusted revenue.
"Even in a quarter when you don't have any new releases at all,
you can still make a lot of money on digital," said Ben Schachter,
a senior analyst with Macquarie Group.
Under U.S. accounting rules, game companies defer some revenue
for online-enabled games for as long as they plan to provide
content. That has a significant impact on game companies, which
increasingly are making expansion packs and other add-on content a
big part of game releases.
Take-Two said its loss widened to $67 million, or 81 cents a
share, from $35.4 million, or 45 cents a share, a year ago. The
company reported a nearly 30% jump in total operating expenses.
Revenue under generally accepted accounting principles more than
doubled to $275.3 million.
For the second quarter, Take-Two said it expects adjusted
revenue of between $275 million and $325 million, and adjusted
per-share profit of between 5 cents and 15 cents.
Analysts had been expecting revenue of $189.3 million and a loss
of 22 cents a share, according to Thomson Reuters.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
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