* Revenue, net income beats Street
* Stock up 7 percent
* Raises lower-end of fiscal 2013 forecast
By Malathi Nayak
SAN FRANCISCO, Feb 5 Video game publisher
Take-Two Interactive Software Inc 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 Dec. 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
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
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 PlayStation and
Microsoft Corp's Xbox, expected later this year.
Take-Two's bigger rival, Electronic Arts Inc, 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 Sept. 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
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.