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Interactive Software $TTWO has delivered strong earnings again, shares ripped over 10%& to a new record high after the video game publisher and distributor reported September Quarter earnings and raised guidance. Grand Theft Auto V and Grand Theft Auto Online again delivering. 

Grand Theft Auto

 

It has been a strong season for gaming stocks; Activision Blizzard $ATVI Raised Guidance Ahead of Call of Duty WWII and Sony Shares Soared Over 12% on PlayStation Gaming Profits.

Earnings: Fiscal second quarter ended Sept. 30 earnings per share of $1.09, up 65% year over year, on sales of $577 million, up 20%, on an adjusted basis beating analysts consensus 74 cents EPS and $515 million revenue.

Reaction: Take-Two Interactive Software Inc NASDAQ: $TTWO Close $117.65 +$11.26 +10.58% (New ATH $120.62)

The video game publisher and distributor beat on revenue and increased it's guidance for the full year. 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 not scheduled to take place until fiscal year 2018.

TTWO does great at keeping the customer happy, Net sales from recurrent consumer spending  continue to make well over 50% of sales. 

Preview of Bite Image

 

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.

Guidance

For the December quarter, Take-Two expects to earn an adjusted 89 cents a share on sales of $635 million, based on the midpoint of its guidance. Wall Street was expecting 82 cents and $545 million.

Source: TTWO, Alphastreet

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