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Feb. 9, 2021, 7:39 a.m. EST

Take-Two earnings, outlook top Wall Street estimates on strong holiday quarter

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By Wallace Witkowski

Take-Two Interactive Software Inc. reported a better-than-expected outlook and results late Monday as sales gained a holiday boost during the COVID-19 pandemic, and said it was moving past its bid to acquire U.K.-based racing games publisher Codemasters.

Late Monday, Take-Two /zigman2/quotes/204008930/composite TTWO +0.23% reported fiscal third-quarter net income of $182.2 million, or $1.57 a share, compared with $163.6 million, or $1.43 a share, in the year-ago period.

Revenue declined to $860.9 million from $930.1 million in the year-ago quarter. Analysts surveyed by FactSet had forecast $1.12 a share on revenue of $757.5 million.

Take-Two forecast earnings of 88 cents to 98 cents a share on revenue of $702 million to $752 million for the fourth quarter, and $4.08 to $4.18 a share on revenue of $3.24 billion to $3.29 billion for the year. Analysts had estimated 59 cents a share on revenue of $584.1 million for the fourth quarter, and $3.69 a share on revenue of $3.29 billion for the year.

Take-Two publishes such franchises as “Grand Theft Auto” and “Red Dead Redemption” under its Rockstar Games label, and “Borderlands” and “NBA2K” under its 2K label. Even with the strong results and outlook, shares were last down 4% after hours, following a 2.8% gain in the regular session to close at $213.14.

In January, Take-Two dropped its bid for Codemasters after Electronic Arts Inc. /zigman2/quotes/206954087/composite EA -0.77% offered more for the U.K.-based racing games publisher. 

“We lost the Codemasters deal to our friends out west,” said Strauss Zelnick, Take-Two’s chief executive and chairman, on the Monday conference call. “That was disappointing, but reflects our discipline in such matters.”

“We’re adding to the teams at 2K and Rockstar as they work on more properties and bigger properties,” Strauss said, noting that the company’s focus is on adding to production and engineering positions. “We have shown a willingness to acquire companies, and add that way as well, very, very selectively.”

Also, late Monday, EA announced that it was buying Glu Mobile Inc. /zigman2/quotes/202654199/composite GLUU +0.08% for $2.4 billion. On the mobile games front, Take-Two acquired Playdots for $192 million back in August and developer Social Point for $250 million back in 2017, which Take-Two President Karl Slatoff said on the call gave Take-Two “a pretty sizable platform” in mobile games.

Over the past few years, mobile gaming has been the videogame sector’s fastest-growing platform, accounting for about half of the roughly  $180 billion in 2020 sales  with PC and console-based games making up the other half, according to IDC data.

Over the past 12 months, Take-Two shares have surged 89%, while the iShares Expanded Tech-Software Sector ETF /zigman2/quotes/201870252/composite IGV +0.64% is up 47%, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.77% has gained 18%, and the tech heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.51% is up 47%.

Last week, EA shares retreated from a record closing high after the videogame publisher  reported quarterly results that fell short of Wall Street expectations  while Activision Blizzard Inc. /zigman2/quotes/200717283/composite ATVI -0.70% shares soared following results .

For their part, EA shares are up 31% over the past 12 months, while Activision Blizzard shares are up 64%.

/zigman2/quotes/204008930/composite
US : U.S.: Nasdaq
$ 184.02
+0.42 +0.23%
Volume: 850,926
April 9, 2021 4:00p
P/E Ratio
43.07
Dividend Yield
N/A
Market Cap
$21.19 billion
Rev. per Employee
$532,581
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/zigman2/quotes/206954087/composite
US : U.S.: Nasdaq
$ 140.46
-1.09 -0.77%
Volume: 1.77M
April 9, 2021 4:00p
P/E Ratio
34.81
Dividend Yield
0.48%
Market Cap
$40.40 billion
Rev. per Employee
$557,755
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/zigman2/quotes/202654199/composite
US : U.S.: Nasdaq
$ 12.47
+0.01 +0.08%
Volume: 1.76M
April 9, 2021 4:00p
P/E Ratio
133.80
Dividend Yield
N/A
Market Cap
$2.20 billion
Rev. per Employee
$673,968
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/zigman2/quotes/201870252/composite
US : U.S.: Cboe BZX
$ 363.76
+2.30 +0.64%
Volume: 662,092
April 9, 2021 4:00p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,128.80
+31.63 +0.77%
Volume: 1.88B
April 9, 2021 5:15p
loading...
/zigman2/quotes/210598365/realtime
US : Nasdaq
13,900.19
+70.88 +0.51%
Volume: 3.52M
April 9, 2021 5:16p
loading...
/zigman2/quotes/200717283/composite
US : U.S.: Nasdaq
$ 95.78
-0.68 -0.70%
Volume: 4.30M
April 9, 2021 4:00p
P/E Ratio
33.89
Dividend Yield
0.49%
Market Cap
$74.21 billion
Rev. per Employee
$851,474
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