Take-Two Interactive Software Smashes March-Quarter Targets By Investors Business Daily
Video game publisher Take-Two Interactive Software (TTWO) late Wednesday obliterated Wall Street’s targets for its fiscal fourth quarter as the coronavirus pandemic drove a surge in game usage. However, TTWO stock fell in extended trading on weak full-year guidance.
The New York City-based company earned an adjusted $1.50 a share on net bookings of $729.4 million for the quarter ended March 31. Analysts expected Take-Two earnings of 89 cents a share on sales of $582 million. In the year-earlier period, Take-Two earned an adjusted 78 cents a share on net bookings of $488.4 million.
For the current quarter ending June 30, Take-Two expects to earn an adjusted $1.50 a share on net bookings of $825 million. That’s based on the midpoint of its outlook. Wall Street was modeling earnings of 50 cents a share on sales of $476.6 million in its fiscal first quarter.
While TTWO stock and its peers have gotten a boost from increased game usage by people stuck at home during the Covid-19 pandemic, the maker of such hit games as “Grand Theft Auto” and “Red Dead Redemption” guided below views for the current fiscal 2021.
Year Ahead Will Be Light For New Game Releases
For the full fiscal year, Take-Two forecast adjusted earnings of $3.12 a share on net bookings of $2.6 billion. Analysts were looking for $4.34 a share on sales of $2.69 billion. Its fiscal year ends March 31, 2021.
“While fiscal 2021 will be a light new release year, we expect to deliver strong results, reflecting the diversity and strength of our catalog and live service offerings,” Chief Executive Strauss Zelnick said in the earnings news release.
The company has some major game releases coming next year, including sequels from its biggest franchises and new properties, he said. That’s partly related to the next-generation game consoles coming this holiday season from Microsoft (MSFT) and Sony (SNE).
“We’re definitely mindful of the fact that new consoles are coming and we are developing for them,” Zelnick told Investor’s Business Daily. “We always want to balance being in a place where the consumer is with bringing out our highest quality titles. This year will be a light release schedule as the consoles are initially launched.”
TTWO Stock Surges In Late Trading
In after-hours trading on the stock market today, TTWO stock initially jumped but soon reversed. In recent trades, it was down 3.4%, near 141.80. During the regular session, TTWO rose 3.2% to 146.84. Earlier in the session, TTWO stock notched an all-time high of 149.26.
On April 14, TTWO stock broke out of a cup-with-handle base at a buy point of 124.01, according to IBD MarketSmith charts. It ended the regular session Wednesday just below the 20%-to-25% profit-taking zone.
The IBD Stock Checkup tool ranks TTWO stock as fifth out of 14 stocks in IBD’s Computer Software-Gaming industry group. That group ranks No. 11 out of 197 industry groups tracked by IBD.
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