Take-Two Q3 Profit Tops Street, Lifts Outlook; Shares Up 8%

(RTTNews) - Take-Two Interactive Software Inc. (TTWO), Wednesday posted a loss for the third quarter compared to a profit last year as revenues dropped due to lower number of releases. Nevertheless, both earnings and revenues for the quarter trounced Wall Street Analysts' estimates.

Moving ahead, the video game publisher raised its full-year financial guidance driven by better-than-expected third-quarter profit and strong outlook for the rest of the year. Shares of Take-Two gained over 8 percent in the after-hours trading.

New York-based Take-Two reported third-quarter net loss of $42.4 million or $0.51 per share, compared to a profit of $40.1 million or $0.42 per share last year.

Excluding items, adjusted earnings for the quarter dropped to $99.7 million or $0.89 per share from $211.6 million or $1.87 per share a year ago. On an average, 16 analysts polled by Thomson Reuters expected earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the third quarter dropped to $414.2 million from $531.1 million last year. Adjusted revenues, which exclude effects of change in deferred revenues, dropped to $486.8 million from $954.0 million. Analysts had a consensus revenue estimate of $452.8 million for the quarter.

Last year's top line benefited from the launches of Grand Theft Auto V for PlayStation4 and Xbox One, Borderlands: The Pre-Sequel, and Sid Meier's Civilization: Beyond Earth.

CEO Strauss Zelnick said, "These outstanding results were driven by robust sales of Grand Theft Auto V, NBA 2K16 and WWE 2K16, along with our highest-ever revenue from recurrent consumer spending."

Looking forward to the fourth quarter, Take-Two expects adjusted earnings of $0.15 to $0.25 per share on adjusted revenues of $260 million to $310 million. Analysts currently expect earnings of $0.07 per share on revenues of $241.97 million.

For the full year 2016, Take-Two now expects adjusted earnings of $1.65 to $1.75 per share on revenues of $1.48 billion to $1.53 billion. Analysts currently expect earnings of $1.15 per share on revenues of $1.43 billion for 2016.

Earlier, the company expected adjusted earnings of $1.00 to $1.15 per share on adjusted revenues of $ 1.325 billion to $1.425 billion.

TTWO closed Wednesday's trading at $32.83, down $0.61 or 1.82%, on the Nasdaq. The stock, however, gained $2.66 or 8.10% in the after-hours trading.