Take-Two Interactive Software Misses Where It Counts

Seth Jayson, The Motley Fool
Updated

Take-Two Interactive Software (NAS: TTWO) reported earnings on May 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q4), Take-Two Interactive Software beat expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP loss per share grew.


Margins shrank across the board.

Revenue details
Take-Two Interactive Software reported revenue of $148.1 million. The 15 analysts polled by S&P Capital IQ hoped for a top line of $141.7 million on the same basis. GAAP reported sales were 19% lower than the prior-year quarter's $182.3 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.60. The 15 earnings estimates compiled by S&P Capital IQ forecast -$0.55 per share. GAAP EPS were -$0.79 for Q4 versus -$0.39 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 21.4%, 1,270 basis points worse than the prior-year quarter. Operating margin was -41.3%, 2,900 basis points worse than the prior-year quarter. Net margin was -45.1%, 3,300 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $252.7 million. On the bottom line, the average EPS estimate is -$0.60.

Next year's average estimate for revenue is $1.83 billion. The average EPS estimate is $2.26.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,151 members out of 1,238 rating the stock outperform, and 87 members rating it underperform. Among 278 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 262 give Take-Two Interactive Software a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Take-Two Interactive Software is outperform, with an average price target of $18.88.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Take-Two Interactive Software. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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