Take Two profits strong on "Grand Theft Auto" lift

SAN FRANCISCO (Reuters) - Video game publisher Take Two Interactive Software (TTWO.O) made a higher-than-expected quarterly profit on strong "Grand Theft Auto 4" sales, but cut its current-quarter outlook due to the delayed release of a new game.

Nevertheless, the ongoing popularity of "GTA4" and expectations of strong holiday-season sales gave Take Two enough confidence to raise its full-year outlook to above Wall Street estimates, which pushed its shares up 2 percent in extended trade.

Take Two, which is in the midst of negotiations with rival Electronic Arts Inc (ERTS.O) about a potential deal, sold roughly 1.5 million copies of "GTA4" to consumers in the third quarter ended July 31. As of August 16, more than 10 million copies were sold since the game launched on April 29.

Take Two cut its fourth-quarter guidance for profit before items to 1 cent to 5 cents per share, while lifting full-year guidance to a range of $2.08 to $2.12 per share, due to its better-than-expected third quarter and a delayed release of its "Midnight Club: Los Angeles" game.

Analysts had been expecting a profit of $1.81 per share for 2008, according to the average on Reuters Estimates.

Net income for the third quarter was $51.8 million, or 67 cents per share, compared with a loss of $58.5 million, or 81 cents per share, a year ago.

Excluding stock compensation and other expenses, New York-based Take Two earned 93 cents per share, beating the average analyst estimate of 54 cents on Reuters Estimates.

Take Two more than doubled its revenue to $433.8 million in the latest quarter on sales of the "GTA4", "Top Spin 3" and other popular games.

Take Two shares rose about 50 cents in extended trade after closing Thursday's session at $23.23 on Nasdaq.

EA had offered $2 billion, or $25.74 a share, to buy Take Two, but let that offer lapse last month.

Last month, the two video game makers signed a confidentiality agreement after agreeing to hold private talks about a potential transaction.

The agreement came after EA dropped its hostile pursuit of Take Two, which in turn agreed to spell out its three-year product plans, but only in private.

U.S. antitrust regulators said last month they would approve a combination of the two companies.

(Reporting by Anupreeta Das; Editing by Braden Reddall)