Video game publisher Take-Two Interactive Software late Monday beat Wall Street's earnings estimate for the December quarter. But its bookings and guidance were below views, and TTWO stock fell in extended trading.
The New York City-based company earned an adjusted $1.32 a share on net bookings of $866 million in its fiscal third quarter ended Dec. 31. Analysts had expected Take-Two earnings of $1.12 a share on sales of $868 million, according to FactSet. On a year-over-year basis, Take-Two earnings and net bookings both rose 6%.
For its fiscal fourth quarter ending March 31, Take-Two forecast adjusted earnings of 83 cents a share on net bookings of $833 million. That's based on the midpoint of its guidance. Analysts were expecting earnings of $1.15 a share on net bookings of $925 million for the March quarter, FactSet said.
The largest contributors to Take-Two's net bookings growth in the holiday quarter included "NBA 2K22," along with the "Grand Theft Auto" and "Red Dead Redemption" franchises.
TTWO Stock Dips After Report
In after-hours trading on the stock market today, TTWO stock dropped 2.1%, near 171.40. During the regular session Monday, TTWO stock rose a fraction to close at 175.10.
"Once again we performed exceedingly well across the board," Chief Executive Strauss Zelnick told Investor's Business Daily. "All of our titles did incredibly well."
Take-Two is successful because of its "laser focus" on quality gameplay, he said.
"Our strategy from the very beginning has been to be the most creative, most innovative and most efficient company in the entertainment industry," Zelnick said. "We have 11 franchises that have each had at least one 5-million-unit release. And each time we put out a new iteration of one of those franchises, we sell more units than the time before. And that distinguishes us from everyone else in the business."
On Friday, TTWO stock jumped 7.4% after the company announced that it's working on a new edition to its "Grand Theft Auto" franchise. The video game press refers to that title as "Grand Theft Auto 6." Game development studio Rockstar Games said details will be announced later.
Activision, EA Miss Holiday Views
Last week, Take-Two peers Activision Blizzard and Electronic Arts delivered disappointing December-quarter results.
Santa Monica, Calif.-based Activision earned an adjusted $1.25 a share on net bookings of $2.49 billion in the fourth quarter. Analysts had expected earnings of $1.31 a share on sales of $2.82 billion, FactSet said. On a year-over-year basis, earnings rose 3% while net bookings dropped 18%.
Activision's big holiday release, "Call of Duty: Vanguard," flopped.
Redwood City, Calif.-based EA earned an adjusted $3.20 a share on net bookings of $2.58 billion in its fiscal third quarter ended Dec. 31. Analysts had predicted earnings of $3.21 a share on net bookings of $2.66 billion, FactSet said.
EA's major holiday title, "Battlefield 2042," underperformed in the period.
For the current quarter, EA forecast adjusted earnings of $1.38 a share on net bookings of $1.76 billion. Wall Street had estimated earnings of $1.45 a share on net bookings of $1.81 billion.
TTWO stock ranks third out of 21 stocks in IBD's Computer Software-Gaming industry group, according to IBD Stock Checkup. But it has a so-so IBD Composite Rating of 71 out of 99. EA ranks first in the group with a Composite Rating of 78. Activision stock is second with a Composite Rating of 72.
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