Take-Two revenue rises in third quarter, beats Street
SAN FRANCISCO (Reuters) - Video game publisher Take-Two Interactive Software Inc (TTWO.O) reported higher revenue and earnings in the third quarter, driven by robust sales of its sports title "NBA 2K13" and "Borderlands: 2."
Take-Two shares were up 7 percent in after-hours trading after closing at $12.66 on the Nasdaq.
The games maker forecast non-GAAP revenue for the year to end-March of $1.15 billion to $1.2 billion and earnings of 5 cents to 20 cents per share from nil to 20 cents per share previously, up 25 percent at the mid-point.
Better-than-expected results prompted the company to raise the lower end of its non-GAAP earnings outlook, Strauss Zellnick, Chairman and CEO said in an interview.
Take-Two, which publishes the hit "Grand Theft Auto" franchise, said net revenue was $416 million in the quarter ended December 31, compared with $236.3 million a year earlier. That beat the $361.9 million average estimate of analysts, according to Thomson-Reuters I/B/E/S.
"It was driven by the huge success of 'NBA 2K13,'continued strong sales of 'Borderlands 2' and a successful launch of 'XCOM: Enemy Unknown,' as well as very strong holiday sales of our catalog and digitally delivered offerings," Zellnick said.
It reported a net income of $71.36 million, or 66 cents per share, compared with $14.1 million, or 16 cents per share a year ago. The net income also exceeded Wall Street's view of 54 cents.
Take-Two's management is executing results successfully in a difficult environment, Mike Hickey, an analyst at National Alliance Capital Markets said.
"The market really under appreciated the leverage these guys have created by cutting costs and product sales are exceeding expectations."
STRONG INTELLECTUAL PROPERTY
The video game industry has been grappling with flagging sales since last year. Analysts say consumers are holding back from buying hardware and software as they wait for rumored next-generation versions of Sony Corp's (6758.T) PlayStation and Microsoft Corp's (MSFT.O) Xbox, expected later this year.
Take-Two's bigger rival, Electronic Arts Inc (EA.O), slashed its fiscal 2013 earnings forecast last week after a weaker-than-expected holiday quarter as the industry struggles with slow demand.
Despite the market showing weakness, Take-Two's roster of fast-paced action games such as its first-person shooters has gamers hooked to its new and old titles, Hickey said.
Led by the hit "Grand Theft Auto IV" game that launched in 2008, Take-Two's catalog sales accounted for 22 percent of its non-GAAP revenue of $405 million, the company said.
"Their quality content is continuing to sell," Hickey said.
For the fourth quarter, Take-Two has first-person shooter "BioShock Infinite" lined up for release on March 26. Last week, the company said it delayed the release of its much-anticipated new title from its "Grand Theft Auto franchise to September from its previous spring release window.
"Grand Theft Auto V" will be released on September 17 for the Xbox 360 and PlayStation3 consoles.
The delay was to allow Take-Two's Rockstar Games studio, which develops "Grand Theft Auto" games, additional development time, the company said.
"September will be a stronger marketing window with an enormously high install base and a pretty open field," Zellnick said.
Some analysts said the delayed launch could mean Take-Two is creating a "cross-generation" title that could work on current and next-generation consoles.
"We haven't discussed any such plans, we're really focused on current-generation," Zellnick said.
(Reporting By Malathi Nayak. Editing by Andre Grenon)
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