Take-Two Profit Beats Street, Lifts FY Outlook; Shares Gain 6%

(RTTNews) - Shares of video game publisher Take-Two Interactive Software Inc. (TTWO), gained six percent in the after-hours trade after its earnings and revenues for the third quarter trumped Wall Street estimates, reflecting solid holiday sales of its blockbuster game "Grand Theft Auto V."

Moving ahead, the company once again raised its full-year financial outlook anticipating the launches of "Evolve" and "Grand Theft Auto V" for PC.

However, on an reported basis, both earnings and revenues for the quarter dropped as last year's results included revenues related to sell-in of the "Grand Theft Auto V" game.

New York-based Take-Two reported its third-quarter profit dropped to $40 million or $0.42 per share from $578.4 million or $4.69 per share last year.

Excluding items, adjusted earnings for the quarter rose to $211.6 million or $1.87 per share from $210.7 million or $1.70 per share a year ago. On an average, 18 analysts polled by Thomson Reuters expected earnings of $1.52 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the third quarter dropped to $531 million from $1.86 billion a year ago. Adjusted revenues, which exclude effects of change in deferred revenues, rose to $954.0 million from $767.7 million, reflecting sales of "Grand Theft Auto V" that was released for the next-gen consoles. Analysts had a consensus revenue estimate of $797.7 million for the quarter.

Take-Two released "Grand Theft Auto V" for Xbox One and PlayStation 4 last November and sold nearly 10 million units. The company had initially released the blockbuster game for older gaming consoles in September 2013 and has sold-in more than 45 million units. The title is planned for a PC launch on March 24.

Looking forward to the fourth quarter, Take-Two expects adjusted earnings of $0.15 to $0.25 per share on adjusted revenues of $410 million to $460 million. Analysts currently expect earnings of $0.25 per share on revenues of $437.4 million.

For the full year 2015, Take-Two now expects adjusted earnings of $1.65 to $1.75 per share on adjusted revenues of $1.65 billion to $1.70 billion. Analysts currently expect earnings of $1.38 per share on revenues of $1.52 billion for 2015.

Earlier, the company predicted earnings of $1.05 to $1.30 per share on revenues of $1.4 billion to $1.5 billion for the year.

"Looking ahead, we expect that our fourth quarter will provide a strong finish to fiscal 2015, which is lining up to be one of Take-Two's best years ever. Anchored by the eagerly-anticipated launches of Evolve and Grand Theft Auto V for PC, along with an array of other offerings, we will continue to deliver titles that captivate audiences around the world and set benchmarks for excellence," said CEO Strauss Zelnick.

TTWO closed Tuesday's trading at $29.84, down $0.15 or 0.50%, on the Nasdaq. The stock, however, gained $1.56 or 5.23%, in after-hours trade.