Take-Two (TTWO) Has a 'Rockstar' Fourth Quarter, Analysts Chime In

Take-Two Interactive Software Inc. (Nasdaq: TTWO) is trading higher today following a blow out fourth quarter from the company.

The game publisher reported an EPS of $0.67 on revs of $373.7 million, compared to the consensus EPS of $0.31 with revs of $325.23 million.

TTWO gave guidance looking for Q111 EPS of $0.25 - $0.35 on revs of $290 - $315 million. Consensus sees an EPS of $0.04 and revs of $206.51 million.

FY11 is expected to result in an EPS of $0.50 - $0.65 with sales of $1.0 - $1.1 billion, versus the consensus EPS of $0.88 and revs of $1.14 billion.

The company is expecting a Q211 loss.

Commenting on the results:

• Wedbush notes that revs were led by NBA 2K11, Red Dead Redemption, and strong showings from titles such as Mafia II, Civilization, and GTA IV, among others. Looking forward, Wedbush is initiating Q311 revs of $320 million with an EPS of $0.36 and Q411 revs of $160 million and a loss of $0.45 per share. Wedbush notes that they appear to be on a path of consistent profitability.
  
  They note that, "even without a GTA release, the company will generate a profit in its new FY:12. We note that the company’s baseball contract expires in 2012, creating an opportunity for $0.30/share of accretion in FY:13. We are confident that Take-Two will release GTA in either late 2011 or early 2012, in addition to BioShock Infinite in 2012, and think the company can generate sustainable earnings growth in each year if release timing is right."
  
  They maintain a Neutral rating, increasing their price target from $11 to $15.
  
  
• Wells Fargo says that, "Take-Two can maintain profitability through F12. However, this assumes the company can overcome recent struggles to deliver high quality game experiences on time." Going forward, Wells expects tough comps following strong showings from RDR and NBA 2K11. They "believe Take-Two should be able to maintain non-GAAP profitability into F2012 when the company is expected to release four AAA properties including LA Noire, XCOM, Spec Ops: The Line and Duke Nukem Forever."
  
  They are introducing an FY11 outlook calling for an EPS of $0.50 - $0.65 with revs of $1.0 - $1.1 billion, and FY12 EPS of $0.30 on revs of $1.03 billion.
  
  Wells has a Market Peform, with a valuation range of $11 - $13.
  
  
• Kaufman Bros. says that there is no question that TTWO can make profitable games, but mystery surrounds how often and to what degree? Kaufman thinks "Take-Two can generate a 15% increase in total revenues to $1.25 billion and non-GAAP EPS of $1.20 with no fiscal 2012 GTA release." Following the next GTA release, they expect revs and EPS to fall back to more normalized levels.
  
  Looking at Q311, Kaufman sees revs of $315 million and an EPS of 0.35. Q411 revs of $150 million and a loss of $0.50 per share. FY11 revs of $1.1 billion and an EPS of $0.60.
  
  
• Brean Murray says that their lineup remains vague. "The swing variable for FY12 estimates remains the timing of GTA V. We note that Rockstar Studio's contract ends in January 2012, suggesting that the game could be released towards the end of CY11. However, given Take Two's history of title slippage, the exact date remains very uncertain."
  
  Brean maintains their Hold rating.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Jefferies sees a buying opportunity in this S&P 500 sector
• UBS Reiterates Buy Rating on Sysco (SYY) Following Trip to Company Headquarters
• Benchmark Reiterates Buy Rating on NANO Nuclear Energy (NNE)