What Stands Out in Take-Two and EA's Q2 Reports

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A couple of the biggest names in the video game industry reported earnings on Thursday. Take-Two Interactive Software Inc. (NASDAQ: TTWO) and Electronic Arts Inc. (NASDAQ: EA) each delivered their most recent quarterly results, with starkly different reactions from investors. Although COVID-19 has proven fruitful for the video game industry, the craze may be cooling as vaccine hopes are starting to materialize.

24/7 Wall St. has included a brief breakdown of each company’s report, as well as the stock’s reaction and recent trading history.

Take-Two said that it had $0.86 in GAAP earnings per share (EPS) and $841.1 million in revenue for the fiscal second quarter. Analysts had called for EPS of $0.99 and $584.6 million in revenue. The same period of last year reportedly had $0.63 in EPS on revenue of $857.8 million.

During first-quarter fiscal 2021, total net bookings grew less than 1% to $957.5 million. Net bookings from recurrent consumer spending grew 43% and accounted for 64% of total net bookings. The largest contributors to net bookings this quarter were NBA 2K21 and NBA 2K20; Grand Theft Auto Online and Grand Theft Auto V; Red Dead Redemption 2 and Red Dead Online.

Looking ahead to the fiscal third quarter, Take-Two expects to see EPS in the range of $1.10 to $1.21 and revenue between $860 million and $810 million. Consensus estimates are calling for $0.70 in EPS and $688.31 million in revenue for the quarter.

EA posted $0.63 in EPS on $1.15 billion in revenue. The consensus estimates had called for $0.35 in EPS and $958.9 million in revenue. The fiscal second quarter of last year reportedly had EPS of $2.89 on $1.35 billion in revenue.

During the latest quarter, net bookings for the trailing 12 months were $5.577 billion, up 8% year over year.

So far this fiscal year, EA has launched more than 125 games and content packs on the Steam platform. Also, EA Play now has more than 6.5 million paid subscribers.

In terms of games, EA launched UFC 4, Madden NFL 21, Rocket Arena and Star Wars Squadrons in the fiscal second quarter.

Looking ahead to the fiscal third quarter, the company expects to see EPS of $0.61 and revenues of $1.68 billion. Consensus estimates call for $2.93 in EPS and $2.33 billion in revenue for the quarter.

Take-Two Interactive Software stock was trading relatively flat on Friday, at $169.12, in a 52-week range of $100.00 to $180.61. The consensus price target is $188.04.

Electronic Arts stock traded down about 8% to $118.47. The 52-week range is $85.69 to $147.36, and the consensus analyst target is $153.53.

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