Take-Two raises forecast on boost from 'NBA 2K18', 'Grand Theft Auto'

(Reuters) – Take-Two Interactive Software Inc lifted its full-year adjusted revenue forecast on Wednesday, as the videogame maker expects to benefit from the latest version of its popular basketball franchise and its iconic “Grand Theft Auto” series.

The company is betting on these two games after further delaying last week the launch of its highly anticipated Western action-adventure “Red Dead Redemption 2” to Oct. 26. The game was scheduled to be launched in spring 2018.

Take-Two’s basketball franchise “NBA 2K18”, launched in September, grabbed the No.2 spot on the 2017 best-selling games list, according to market research firm NPD Group.

The company’s “Grand Theft Auto V” was the No.3 selling title last year in terms of units sold, according NPD, four years after the game’s first release.

“We are expecting another record year for ‘Grand Theft Auto Online’,” Chief Executive Strauss Zelnick said on a call with analysts. “Everything is going better-than-expected and we do have pretty high expectations.”

The game’s online version has also helped in its longevity. The company launched “Doomsday Heist” for “GTA Online” during the holiday quarter.

However, Take-Two forecast current-quarter revenue largely below Wall Street’s expectations. The company said it expected adjusted revenue of $410 million to $460 million, compared with analysts’ average estimate of $442.1 million.

There is a bit of seasonality in our business. You can’t really compare quarter-to-quarter or same quarter over the prior-year quarter, Zelnick said.

Shares of the company, which more than doubled in value in 2017, fell 2.4 percent in extended trading on Wednesday.

U.S. videogame producers typically guide below market expectations but almost always beat them.

For the year ending March 31, Take-Two said it expected adjusted revenue forecast of $1.99 billion to $2.04 billion, up from $1.93 billion to $2.03 billion.

Analysts on average were expecting $2.02 billion, according to Thomson Reuters I/B/E/S.

Take-Two said it expects to deliver record adjusted revenue in excess of $2.5 billion for fiscal 2019.

The company reported net income of $25.1 million, or 21 cents per share, in third quarter ended Dec. 31, compared with a loss of $29.8 million, or 33 cents per share, a year earlier.

Take-Two said it had a net benefit of $11.9 million in the latest quarter from the overhaul of the U.S. tax code.

On an adjusted basis, the company reported revenue of $653.9 million, while analysts’ on average had expected $663.8 million.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila

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