Video game publisher Take-Two Interactive Software delivered a mixed fiscal fourth-quarter report and gave soft guidance for the current year. But it predicted big sales growth next year. TTWO stock jumped on the news on Thursday.
The New York City-based company late Wednesday said it earned an adjusted 59 cents a share on net bookings of $1.39 billion in the quarter ended March 31. Analysts polled by FactSet had expected earnings of 68 cents a share on sales of $1.34 billion. On a year-over-year basis, Take-Two earnings fell 46% while net bookings surged 65%. Take-Two's sales got a lift from its acquisition of mobile games publisher Zynga, completed in May 2022.
For the current quarter ending June 30, Take-Two predicted adjusted earnings of 29 cents a share on net bookings of $1.18 billion. That's based on the midpoint of its outlook. Wall Street had called for earnings of 87 cents a share on sales of $1.29 billion for Take-Two's fiscal first quarter.
For the full fiscal year ending March 31, 2024, Take-Two expects to earn an adjusted $3.12 a share on net bookings of $5.5 billion, based on the midpoint of its outlook. Analysts were seeking earnings of $4.87 a share on sales of $6.11 billion in fiscal 2024. In the just-ended fiscal 2023, Take-Two earned an adjusted $3.48 a share on net bookings of $5.28 billion.
TTWO Stock Rises After Report
On the stock market today, TTWO stock rocketed 11.7% to 139.63. With the advance, TTWO stock broke out of a consolidation pattern at a buy point of 137.53, according to IBD MarketSmith charts.
"Our expectations for the coming year are on the lighter side from a front-line release perspective and are reflective of a still challenging economy," Chief Executive Strauss Zelnick told Investor's Business Daily.
However, Take-Two will enter its next growth phase in fiscal 2025, with momentum carrying into fiscal 2026, he said. Zelnick predicted net bookings of more than $8 billion in fiscal 2025.
He noted that several high-profile, long-awaited games have been postponed until fiscal 2025. That likely includes the next chapter in its blockbuster series "Grand Theft Auto."
"We expect that the pipeline we've been investing in aggressively for the past several years will come to fruition beginning in fiscal 2025 and really accelerate in 2026," he said.
Take-Two's Franchises
Take-Two owns such popular game franchises as "Grand Theft Auto," "Red Dead Redemption" and "NBA 2K." Its mobile games include "Empires & Puzzles," "Toon Blast" and "Words with Friends."
TTWO stock ranks seventh out of 23 stocks in IBD's Computer Software-Gaming industry group, according to IBD Stock Checkup. Take-Two has a so-so IBD Composite Rating of 70 out of 99.
Last week, industry peer Electronic Arts smashed Wall Street's targets for its fiscal fourth quarter and raised its outlook for earnings in the current quarter and full year ahead.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
