Take-Two Interactive Software reported revenues that fell short of analyst expectations for the fourth-fiscal quarter ended March 31. That means that revenues were probably not as stellar from hot releases of the fall such as Red Dead Redemption 2.
The company said it had adjusted earnings of 78 cents a share (beating estimates of 76 cents), but its revenue was $488.4 million, below estimates of $506.5 million by analysts.
Analysts had already lowered estimates for the quarter based on Take-Two’s prior guidance. The non-GAAP earnings-per-share consensus was previously $1.09 a share. Take-Two also said that it expects lower revenue than expected for the first fiscal quarter ending June 30. Take-Two expects first fiscal quarter revenue of $310 million to $360 million, compared to $418 million expected by analysts. Full-year revenue expectations are also below analyst expectations at $2.5 billion to $2.6 billion in revenue, compared to analyst estimates of $2.95 billion.
The first-fiscal quarter results include the second quarter of revenues from Red Dead Redemption 2, the Western epic from Take-Two’s Rockstar Games label that was more than seven years in the making. The title debuted on October 26, and it sold 23 million copies in the holiday quarter.
In after-hours trading, Take-Two’s stock is up slightly at $100.01 a share.
“Take-Two finished a stellar year with strong fourth quarter operating results highlighted by the outperformance of Grand Theft Auto Online and Grand Theft Auto V, as well as NBA 2K19, and significant ongoing sales of our blockbuster hit, Red Dead Redemption 2,” said Strauss Zelnick, CEO of Take-Two, in a statement. “For the full fiscal year, our company delivered record net bookings and adjusted operating cash flow, which exceeded our outlook at the start of the year, along with strong earnings growth driven by the record-breaking launch of Red Dead Redemption 2, the outstanding performance of NBA 2K, and better-than expected results from Grand Theft Auto Online and Grand Theft Auto V.
“We expect fiscal 2020 to be another strong year for Take-Two, with operating results currently forecasted to be lower than fiscal 2019, due to the extraordinary success of Red Dead Redemption 2, and growing as compared to fiscal 2018.”
Zelnick also said, “Take-Two has the strongest development pipeline in its history, including sequels from our biggest franchises as well as exciting new IP. In addition, we are actively investing in emerging opportunities such as Private Division, mobile games, esports, and geographic expansion that have the potential to be enormous drivers of growth. We are exceedingly well positioned to generate significant growth and margin expansion over the long-term.”
In February, the company said it expected adjusted revenue of $450 million to $500 million, which at the time was below Wall Street’s projections. Income before taxes was projected at $87 million to $101 million.
A year ago, Take-Two reported non-GAAP earnings of 70 cents per share, on adjusted revenue of $411 million.
In February, the company reported fiscal third-quarter GAAP earnings of $1.57 per share, or non-GAAP earnings of $2.90 per share, on $1.57 billion in adjusted revenue. That was a big quarter because of the fall launch of Red Dead Redemption 2.
NBA 2K 19 has sold more than 9 million copies to date. Red Dead Online’s net bookings grew significantly during the fourth-fiscal quarter, Zelnick said in a conference call with analysts.
Sales of GTA Online and Grand Theft Auto V also exceeded expectations.
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