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Video game publisher Take-Two Interactive Software reported mixed results for its fiscal fourth quarter with a soft outlook for fiscal year. $TTWO was driven primarily by Red Dead Redemption 2, Grand Theft Auto Online and NBA 2K19.

Grand Theft Auto

TAKE-TWO INTERACTIVE SOFTWARE, INC - NASDAQ: TTWO

Reported Earnings After Close Monday

$0.27 Beat Exp $0.03 EPS and $422M Missed $358 million Forecast in Revenue

Earnings

Take-Two Interactive Software (TTWO) late Monday reported earnings for the fiscal firest quarter and guided higher. TTWO earned an adjusted 27 cents a share on net bookings of $422 million in the quarter ended June 30. Wall Street had expected adjusted Take-Two earnings of 3 cents a share on bookings of $358 million, according to Zacks Investment Research. Net bookings grew 46% year over year.

Under generally accepted accounting principles, or GAAP, Take-Two reported earnings per share of 41 cents on sales of $540.5 million. On a year-over-year GAAP basis, Take Two earnings fell 34% while sales climbed 39%.;

TAKE-TWO INTERACTIVE SOFTWARE, INC NASDAQ: TTWO

Market Reaction > Market Close 124.56 USD +9.18 (+7.96%)

  • 'Grand Theft Auto,' 'Red Dead' Lift June-Quarter Sales Under generally accepted accounting principles, or GAAP, Take-Two reported earnings per share of 41 cents on sales of $540.5 million. On a year-over-year GAAP basis, Take Two earnings fell 34% while sales climbed 39%.
  • Big contributors to sales in the June quarter included "Grand Theft Auto Online" and "Grand Theft Auto 5," as well as "Red Dead Redemption 2" and "Red Dead Online."
  • Basketball game "NBA 2K19" also was a solid contributor.

Take Two Interactive Q1 2020 earnings

Red Redemption was an instant hit last quarterwhich should come as a big relief for the firm to reduce its dependency on the Grand Theft Auto franchise. Within three months after launch, the company sold 23 million units, surpassing analyst lifetime estimates for the game.

NBA 2K franchise has also been getting good traction with gamers. Jointly owned with NBA, the game was launched in May 2018 on the lines of a sports league format. Take-Two has announced that next season would see 21 teams participating which would augur well to bump up its revenues. This also would help the firm to grow its esports business in the near future.

A gaming stock's guidance is affected by the games they produce and when and with Take Two the money tree, “Grand Theft Auto Online”. 

Red Dead Redemption 2

Outlook

For its fiscal second quarter ending Sept. 30, Take-Two expects net bookings of $885 million. That's based on the midpoint of its guidance. Analysts were looking for $864 million, Zacks said. For the full fiscal year ending March 31, 2020, Take-Two raised its revenue outlook. It now expects to generate net bookings of $2.65 billion, in line with Wall Street views. CEO Zelnick said he expects Take-Two to have a "great year" thanks to upcoming games "NBA 2K20" and "Borderlands 3," as well as the continued strength of "GTA Online" and "Red Dead Online." Follow Patrick Seitz on Twitter

 

The next big game launch for Take Two will be Borderlands 3. The latest installment in the critically acclaimed "shooter-looter" game series is set to launch on Sept. 13. It will be available for Windows PCs and the PlayStation 4 and Xbox One consoles.

Kerbal Space Program: Breaking Ground is due for launch this month through its Private Division label. In addition,  in the pipeline for release in 2019: Ancestors: The Humankind Odyssey and The Outer Worlds.

What is impressive with $TTWO is both Grand Theft Auto V and Grand Theft Auto Online remain among the company biggest contributors nearly four years after they were first launched for Playstation 3 and Xbox 360. NBA 2K18, WWE 2K18, WWE SuperCard and Mafia III all were top contributors Red Dead Redemption 2 is an exciting addition for fiscal year 2019.

Grand Theft Auto V includes access to Grand Theft Auto Online, which initially launched in 2013. Rockstar Games is also known for developing brands in other genres, including the LA Noire, Bully and Manhunt franchises. Rockstar Games continues to expand on the company’s established franchises by developing sequels, offering downloadable add-on episodes, content and virtual currency, and releasing titles for smartphones and tablets.

Software titles published by the company’s Rockstar Games label are primarily internally developed. It expects Rockstar Games, its wholly-owned publisher of the Grand Theft Auto, Max Payne, Midnight Club, Red Dead, and other franchises, to continue to operate in the action/adventure product category and create groundbreaking entertainment by utilizing its existing titles, as well as developing new brands.

TTWO’s 2K label has published various entertainment properties across all key platforms and across a range of genres, including shooter, action, role-playing, strategy, sports and family/casual entertainment.

2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling BioShock, Mafia, Sid Meier's Civilization and XCOM Enemy Unknown series. 2K also publishes highly externally developed franchises, such as Borderlands and Evolve. 2K's realistic sports simulation titles, including the company’s primary NBA 2K series.

Source: TTWO, Alphastreet,

From The TradersCommunity Research Desk

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