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Courtesy Rockstar Games
Take-Two Interactive Software
stock fell in after-market trading Wednesday after the game publisher beat sales expectations in the March quarter.
The company reported net bookings—a form of adjusted revenue used by game industry analysts—of $729 million, up from $488 million in the 2019 March quarter. Analysts were expecting $582 million. Take-Two’s earnings of $1.07 per share were below FactSet estimates at $1.11.
CEO Strauss Zelnick pointed to better-than-expected results across the board, including popular titles NBA 2K20, Grand Theft Auto Online, Grand Theft Auto V, Red Dead Redemption 2, and Borderlands 3, as well as Social Point’s mobile games.
“Looking ahead, Take-Two has the strongest development pipeline in its history, including sequels from our biggest franchises as well as exciting new IP,” Zelnick said, though he conceded fiscal 2021 will be light, in terms of new releases.
Shares of videogame publishers have soared to new highs amid a surge in gaming activity related to Covid-19 stay-at-home orders. New consoles from
Sony
and
Microsoft
are also expected to launch during the 2020 holiday season—an occasion that historically boosts sales for companies selling games. For Take-Two, analysts are waiting to hear more about sequels to the company’s blockbuster franchises.
“We have an array of titles that we will begin to launch in fiscal 2022, which we expect to drive sequential growth that year,” Zelnick added. “Our company remains superbly positioned—creatively, operationally and financially—to capitalize on the many positive trends in our industry, and to deliver continued growth and returns for our shareholders over the long-term.”
Take-Two expects net bookings between $800 million and $850 million in the June quarter. Wall Street’s consensus estimate had previously called for June quarter net bookings of $498 million.
Despite the good news, Take-Two stock was down 3.9% to $141.16 in after market trading. Jefferies analyst Alex Giaimo said earlier this week that a strong beat may have been priced into the stock. He pointed to “softer pipeline commentary” as a potential catalyst for a pullback.
Write to Connor Smith at connor.smith@barrons.com
