Take-Two Interactive (TTWO) shares slumped lower Tuesday after the Grand Theft Auto and NBA 2K23 video game maker posted weaker-than-expected second quarter earnings and issued a downbeat holiday season forecast.
Take-Two said net bookings for the three months ending in September were up 53% from last year to $1.505 billion, but that tally missed Street forecasts despite a solid boost from the newly-released NBA 2K23, which sold nearly 5 million units.
Earnings were also 7 cents light, at $1.30 per share, with revenues coming in at $1.4 billion and firmly below Street forecasts.
Looking into the final three months of the year, new releases including Marvel’s Midnight Suns and PGA Tour 2K23 will bring net bookings in the region of $1.41 million to $1.46 million. Weakness in the group's mobile sector, as well as the ongoing hit from a stronger U.S. dollar, will keep full-year bookings between $5.4 billion and $5.5 billion, down from its earlier forecast of between $5.8 billion to $5.9 billion.
"We call it as we see it and I think we're known for that. Had we expected where we were right now, then we wouldn't be guiding down. We're guiding down because things have materialized in a way that's different than our expectations," CEO Strauss Zelnick told investors on a conference call late Monday.
"Most of (the lower guidance) is related to mobile, significant amount of FX as well. But there have been some modest pipeline shifts," he added. "So, the good news is those titles are, of course, coming."
Take-Two shares were marked 12.6% lower in early Tuesday trading to change hands at $95.00 each, extending their year-to-date decline to around 47%.
Earlier this fall, Take-Two suffered a cybersecurity breach that allowed a hacker access to several videos of gameplay from the new Grand Theft Auto VI release, which was made by Take-Two studio Rockstar Games, and posted them to a GTA-focused message board.
The hacker, known as 'teapotuberhacker', also claimed responsibility for last week's security breach at Uber Technologies (UBER), which compromised some of its internal communications systems.
"It was terribly unfortunate, and we take those sorts of incidents very seriously indeed," Zelnick said. "There's no evidence that any material assets were taken, which is a good thing."
"And certainly, the leak won't have any influence on development or anything of the sort," he added. "But it is terribly disappointing and causes us to be ever more vigilant on matters relating to cybersecurity."
