Videogame publisher Take-Two Interactive Software Inc reported a 31.4 percent rise in adjusted revenue, driven by strong demand for “NBA 2K17”, the latest version of its popular basketball franchise, as well as higher downloads of its games
. The company’s shares were up 5 percent at $47 in after-market trading on Wednesday. Take-Two, like rivals Electronic Arts and Activision Blizzard, has in recent years benefited from a shift to the high-margin digital business, where players download games rather than buy physical game discs.
Adjusting for deferrals, net revenue rose to $479.4 million from $364.9 million in the second quarter ended Sept.30, beating the average analyst estimate of $402.6 million, according to Thomson Reuters I/B/E/S. Take-Two forecast current-quarter revenue of $675 million to $725 million, compared with the average analyst estimate of $649.7 million. However, the company’s net income fell to $36.4 million, or 39 cents per share, from $54.7 million, or 55 cents per share, a year earlier.
Take-Two said selling and marketing expenses jumped 46.1 percent in the quarter. The company confirmed earlier this month that it would release a new “Red Dead” videogame in the second-half of 2017, after teasing the return of the Western action-adventure series on social media. “We have very high hopes for the project,” Take-Two Chief Executive Strauss Zelnick said in an interview.
A teaser image for the new Red Dead Redemption Game
“Red Dead Redemption 2” should be one of 2017’s biggest releases, Wedbush analyst Michael Pachter said in a pre-earnings note, adding that the game positions the company to deliver profits for the foreseeable future. The new “Red Dead” game will be released by Take-Two’s Rockstar Games studio, best known for creating the popular “Grand Theft Auto” franchise.
Reuters
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