(Bloomberg) — Take-Two Interactive Inc. offered a forecast for revenue in the current quarter that missed analysts’ estimates, sending shares lower as investors await news on timing of the highly anticipated next installment of the Grand Theft Auto franchise.
Adjusted revenue will be $808 million to $858 million in the fiscal fourth quarter, Take-Two said in a statement on Monday, while earnings per share, excluding some costs will be 78 to 88 cents. Analysts had predicted revenue of $918 million and earnings per share of $1.15. The shares fell in extended trading.
Take-Two is the parent company of several video game labels including Rockstar and 2K Games. It operates the lucrative NBA 2K franchise as well as Grand Theft Auto Online, one of the world’s most popular video games. Last week, Rockstar said development of a new Grand Theft Auto game was “well underway,” sending the shares up 7.4%. The previous version of the title has sold more than 160 million units, making it one of the best-selling video games of all time.
But the New York-based company’s remastered versions of old Grand Theft Auto titles in November were a disappointment to fans and it delayed the release of Grand Theft Auto V for the PlayStation 5 and Xbox Series X to March. Take-Two has three other titles slated for release in the current period, including WWE 2K22, Tiny Tina’s Wonderlands and OlliOlli World.
In early January, Take-Two announced plans to purchase Zynga, a move to break into the fast-growing market for smartphone games and bring titles like Grand Theft Auto Online to mobile. The transaction is expected to make Take-Two a leader in the $93 billion global mobile-game market, with that sector expected to comprise more than half of net bookings in fiscal 2023, up from an estimated 12% in fiscal 2022, the company said at the time. It was the video game industry’s largest acquisition ever until a week later when Microsoft Corp. said it was buying Activision Blizzard Inc. for $69 billion. Take-Two has itself been mentioned by analysts as a potential acquisition target as the video game indstry is expected to undergo continued consolidation.
For the fiscal third quarter, Take-Two reported adjusted revenue of $866.12 million missing analysts’ estimates of $871.1 million. Earnings per share were $1.32, beating estimates of $1.12. Take-Two shares slid about 2% in extended trading after the results. They are down about 15% over the past year.
The company raised its outlook for fiscal year 2022, and now expects net bookings of $3.37 billion to $3.42 billion. Take-Two said it has “the strongest and most diverse pipeline” in the company’s history, including new intellectual properties as well as sequels to many beloved franchises.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
