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‘Grand Theft Auto’ Publisher Take-Two Murders March-Quarter Estimates

Video game publisher Take-Two Interactive Software (TTWO) late Tuesday crushed Wall Street’s targets for its fiscal fourth quarter. But it offered mixed guidance. TTWO stock fell in extended trading.




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The New York City-based company earned an adjusted $1.40 a share on net bookings of $784.5 million in the quarter ended March 31. Analysts expected Take-Two earnings of 67 cents a share on sales of $664 million. In the year-earlier period, Take-Two earned an adjusted $1.50 a share on net bookings of $729.4 million.

Starting in the March quarter last year, Take-Two and other game publishers got a sales boost from stay-at-home orders stemming from the Covid-19 pandemic. The video game industry faces difficult year-over-year comparisons as vaccinations increase and the economy reopens.

For the current quarter, Take-Two expects to earn an adjusted 80 cents a share on net bookings of $650 million. That’s based on the midpoint of its guidance. Wall Street had predicted Take-Two earnings of 88 cents a share on sales of $592.3 million. In the June quarter last year, Take-Two earned an adjusted $2.30 a share on net bookings of $996 million.

TTWO Stock Drops In Late Trades

For the current fiscal 2022, Take-Two expects to generate net bookings of $3.2 billion to $3.3 billion. Wall Street had predicted $3.51 billion.

Take-Two’s biggest game franchises include “Grand Theft Auto,” “Red Dead Redemption” and “NBA 2K.”

Chief Executive Strauss Zelnick called the current fiscal year “an investment year” that will set the company up for strong growth in the next two years. For instance, the company recently hired 700 new software developers, he told Investor’s Business Daily. Take-Two plans to launch two new game franchises this year, he said.

In after-hours trading on the stock market today, TTWO stock fell 1%, near 166. During the regular session Tuesday, TTWO stock dipped 0.3% to 167.69.

In addition to TTWO stock, other video game stocks moving on earnings news Tuesday included NetEase (NTES) and Motorsport Games (MSGM).

NetEase Stock Rises On First-Quarter Beat

Early Tuesday, China-based NetEase posted first-quarter results that topped analyst expectations. The provider of internet and online game services earned $1.14 per U.S. share, up 25% year over year, on sales of $3.13 billion, up 30%, in the March quarter. Analysts had expected NetEase earnings of 97 cents a share on sales of $3.11 billion.

NetEase stock rose 3.5% to 108.61 on Tuesday.

Late Monday, Motorsport Games beat Wall Street’s target for revenue, but its per-share loss was wider than expected in the first quarter. The Miami-based maker of racing video games lost $1.30 a share on sales of $2.47 million. In the year-earlier period, it lost $240,000 on sales of $3.23 million.

Motorsport Games went public on Jan. 13. On Tuesday, Motorsport Games stock slid a fraction to 18.45.

TTWO Stock A Laggard In Industry Group

TTWO stock ranks eighth out of 16 stocks in IBD’s Computer Software-Gaming industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 41 out of 99. Meanwhile, NetEase stock ranks No. 7 in the group and Motorsport Games ranks No. 13.

The top-ranked stocks in the video game industry group are NeoGames (NGMS) and Gravity (GRVY).

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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