Will Take-Two See a Boost From Big Q4 Earnings and Outlook?

When Take-Two Interactive Software Inc. (NASDAQ: TTWO) released its fiscal fourth-quarter financial results after the markets closed on Monday, the company said that it had $0.86 in earnings per share (EPS) and $539 million in revenue. Consensus estimates had called for $0.75 in EPS and $506.46 million in revenue, and it the same period of last year, it posted EPS of $0.70 on $411.37 million in revenue.

Total net bookings grew 19% to $488.4 million in the most recent quarter, as compared to $411.4 million during last year’s same period. Net bookings from recurrent consumer spending grew 27% year over year and accounted for 62% of total net bookings.

Digitally delivered net bookings grew 26% to $419.0 million, as compared to $333.1 million in last year’s fourth quarter, and accounted for 86% of total net bookings.

The largest contributors to net bookings were “NBA 2K19”; “Grand Theft Auto Online” and “Grand Theft Auto V”; “Red Dead Redemption 2” and “Red Dead Online”; “Sid Meier’s Civilization VI”; “Dragon City” and “Monster Legends”; and “WWE SuperCard” and “WWE 2K19.”

Looking ahead to the fiscal first quarter, the company expects to see GAAP EPS in the range of $0.65 to $75 and revenue between $485 million and $535 million. Consensus estimates call for $0.42 in EPS and $418.3 million in revenue.

Strauss Zelnick, board chair and chief executive of Take-Two, commented:

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.

Shares of Take-Two were last seen up only fractionally at $100.34 midmorning, in a 52-week range of $84.41 to $139.91. The consensus price target is $122.44.

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