UPDATE 2-Take-Two results top Street, to cut jobs

* Q1 rev $163.2 mln vs Street view $125.5 mln

* Cuts 15 pct of corporate workforce

* Q2 outlook ahead of Street, raises FY10 outlook slightly

* Shares up 5 pct (Recasts, adds analyst comment, updates share price)

By Gabriel Madway

SAN FRANCISCO, March 3 Take-Two Interactive Software Inc (TTWO.O) reported better-than-expected results on strong catalog sales and the video game maker said it would slash 15 percent of its corporate headcount.

The "Grand Theft Auto" publisher also set a forecast for the current quarter above Wall Street's target, and its shares rose 5 percent after hours.

Take-Two boasts some of the world's most popular game franchises but has been hampered by soaring development costs, poor sales and game delays.

Billionaire activist investor Carl Icahn has taken a more than 11 percent stake in the publisher, which has vowed to control costs. Take-Two has agreed to nominate three new directors at his behest.

Take-Two Chairman Strauss Zelnick deflected questions about Icahn's influence on management, but said controlling spending is a main focus.

"It's an ongoing effort to make sure we're really efficient," Zelnick said in an interview.

Take-Two declined to say how many jobs would be cut in the restructuring, but said its game studios would not be impacted. It expects to save $15 million a year.

Janco Partners analyst Mike Hickey said investors were reacting to better-than-expected results and a strong forecast for the second quarter. He called the job cuts a "step in the right direction."

"Any time you can take out cost in this kind of climate that's a good thing."

For the current quarter, the company forecast earnings, excluding items, of 20 cents to 30 cents a share on revenue of $250 million to $300 million. That compares with the analyst target for a profit of 7 cents a share on revenue of $267 million.

Take-Two raised slightly its forecast for fiscal 2010. It now expects a loss of 40 cents to 60 cents a share on revenue of $725 million to $925 million. The company added that it may push back one title slated for fourth-quarter release into fiscal 2011.

"Raised guidance reflects upside in 1Q plus cost cuts, but only a small portion of that upside is flowing through," said MKM Partners analyst Eric Handler.

He said the forecast implies second-half results won't be as strong as expected.

Take-Two posted a net loss of $33.9 million, or 43 cents a share, in the fiscal first quarter ended Jan. 31, versus a year-ago loss of $50.4 million, or 66 cents a share.

Excluding items, the company lost 31 cents a share, better than analysts' average estimate for a loss of 51 cents a share according to Thomson Reuters I/B/E/S.

Revenue rose 9 percent to $163.2 million, versus the Wall Street estimate of $125.3 million.

Sales were led by "Borderlands," "NBA 2K10" and "Grand Theft Auto" catalog titles.

New York-based Take-Two has a fairly strong release slate for the current quarter, with "BioShock 2" and "Red Dead Redemption" leading the way.

Given Icahn's interest in the company, Take-Two is seen by many as a potential buyout target. Take-Two successfully fought off a takeover bid by Electronic Arts ERTS.O in 2008.

Take-Two's stock is down around 10 percent this year. It closed at $9.03 on Nasdaq and rose to $9.50 in extended trading. (Reporting by Gabriel Madway; Editing by Richard Chang)