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Take-Two reports $98.2 million Q2 net profit

Thu 05 Jun 2008 8:29pm GMT / 4:29pm EDT / 1:29pm PDT
Publishing

Take-Two reports higher than expected net earnings, with GTA IV having sold through 8.5 million copies worldwide

Take-Two has announced its financial results for Q2, the period ending April 30, 2008, reporting net profit of USD 98.2 million or USD 1.29 per share on strong sales of Grand Theft Auto IV.

For the same period of the prior year, Take-Two reported a net loss of USD 51.3 million or USD 0.71 cents per share.

The company raised its Q3 revenue forecast to USD 325 - 375 million and earnings per share of USD 0.45 - 0.55. Analysts were expecting earnings per share of USD 0.35 on revenue of USD 322 million.

Take-Two has also raised its full year guidance, anticipating revenues of USD 1.4 - 1.5 million and non-GAAP earnings per share of USD 1.65 - 1.85.

As of May 31, Take-Two has shipped 11 million units worldwide, with sell through of 8.5 million units according to the company.

Take-Two had nothing further to say about EA's outstanding offer to acquire the company, other than to state that it has had discussions with other interested parties.

Update: In a conference call to investors, Take-Two indicated that episodic content for GTA:IV on the Xbox 360 would not be available until Q1 2009. It said that the decision was made due to portfolio balancing, rather than development issues, and would not give any pricing information.

The company said it had 33 titles in varying stages of development. The company had nothing to announce regarding a handheld version of GTA IV.

Take-Two also indicated that its 2K Sports business would not be profitable this fiscal year as previously expected, blaming lower attach rates for new hardware. Strauss Zelnick said that he didn't think it would "maximize shareholder value" to sell off pieces of the company separately.

The company noted that 78 per cent of its total publishing revenue for the quarter came from GTA IV and catalog sales of prior GTA titles.

BioShock has sold 2.2 million copies on the PC and Xbox 360 to date. Zelnick said that the BioShock film probably won't be released at the same time as the launch of BioShock 2 - more likely with the launch of BioShock 3. It is unclear whether a third game is planned or Zelnick was speaking hypothetically.

Of the 4.7 million spent on professional fees and legal expenses related to unusual matters, Take-Two spent USD 3.4 million related to EA's tender offer. It also recognised USD 12.4 million in stock-based compensation expenses.

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