Video-game publisher Take-Two Interactive Software, Inc. (TTWO) said Wednesday after the markets closed that its first quarter loss narrowed from a year ago, helped by higher revenue and better cost control. The company's quarterly loss per share, excluding items, was also better than what analysts predicted.
Additionally, the company said it would reduce its corporate headcount by 15% in a latest round of restructuring. At the same time, the company raised its financial outlook for the fiscal year 2010.
The New York-based company reported a GAAP net loss for the first quarter of $33.9 million or $0.43 per share, compared to a GAAP net loss of $50.4 million or $0.66 per share for the year-ago quarter.
As part of its strategy to focus its resources on its core publishing business, Take-Two last month completed the sale of its Jack of All Games distribution business to SYNNEX Corp. in a deal valued at about $44 billion. The results of the company's distribution segment have been reclassified to discontinued operations for the first quarter ended January 31, 2010. The year-ago results have been adjusted to reflect the sale.
GAAP net loss from continuing operations for the first quarter was $33.8 million or $0.43 per share, compared to a GAAP net loss from continuing operations of $53.8 million or $0.71 per share in the prior year quarter.
The latest quarter results include $6.4 million or $0.08 per share in stock-based compensation expense, $1.7 million or $0.02 per share in non-cash interest expense on the company's convertible notes, $0.7 million or $0.01 per share in professional fees and expenses related to unusual matters and $0.6 million or $0.01 per share in non-cash tax expense. The prior year quarter results included $6.2 million or $0.08 per share in stock-based compensation expense and $4.9 million or $0.06 per share in professional fees and expenses related to unusual matters.
Excluding items, non-GAAP net loss from continuing operations for the first quarter was $24.4 million or $0.31 per share, compared to a non-GAAP net loss from continuing operations of $42.8 million or $0.56 per share in the first quarter of last year.
On average, 19 analysts polled by Thomson Reuters expected the company to report a loss of $0.51 per share for the first quarter. Analysts' estimates typically exclude special items.
Take-Two, famous for its Grand Theft Auto series, said net revenue for the first quarter rose 9% to $163.24 million from $149.35 million in the same quarter last year. Eighteen analysts had a consensus revenue estimate of $125.27 million for the first quarter.
The company noted that first quarter sales were led by Borderlands, NBA 2K10, Grand Theft Auto IV, Grand Theft Auto: Episodes from Liberty City and Carnival Games.
The company said Grand Theft Auto IV from Rockstar Games has sold over 15 million units globally, while NBA 2K10 from 2K Sports has shipped over 2 million units and 2K Play's Carnival Games franchise has sold over 6 million units worldwide on the Wii and DS.
2K Games launched BioShock 2 globally on February 9. The title has shipped over 3 million units to date. The original BioShock title launched in August 2007 has now sold over 4 million units, bringing the total sales of the franchise to 7 million units.
Take-Two said it is implementing a restructuring of its corporate departments, which involves a 15% reduction in corporate headcount and other cost savings initiatives. The company expects the restructuring would save $15 million a year.
Looking forward to the second quarter, the company said it expects revenue of $250 million to $300 million and non-GAAP earnings from continuing operations of $0.20 to $0.30 per share. Analysts currently expect the company to earn $0.07 per share on revenue of $267.42 million for the second quarter.
For the fiscal year 2010, the company said it now expects revenue of $725 million to $925 million and non- GAAP net loss from continuing operations of $0.40 to $0.60 per share. Previously, the company expected revenue of $710 million to $910 million and non-GAAP loss from continuing operations of $0.48 to $0.68 per share.
Analysts currently expect the company to report a loss of $0.56 per share on revenue of $843.92 million for the fiscal year 2010.
Among others in the industry, Electronic Arts Inc. (ERTS) last month reported a third quarter loss that narrowed from last year, when results were weighed down by hefty charges. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations. However, the company forecast fourth quarter earnings below Wall Street expectations.
Also last month, Activision Blizzard Inc. (ATVI) reported a net loss for the fourth quarter, hurt by impairment charges and reduction in the value of intangible assets. However, on a non-GAAP basis, the company posted a better-than-expected earnings, reflecting strong sales of Call of Duty, Guitar Hero, and World of Warcraft.
Take-Two shares, which have traded in a range of $5.56 to $12.57 over the past year, closed Wednesday's regular trading session at $9.03, down 25 cents or 2.69%. The stock is currently gaining 51 cents or 5.65% in after hours trading.
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