Take-Two (TTWO) plunges 17% as mobile business weakness prompts a guidance cut
Shares of Take-Two Software (NASDAQ: TTWO) are down about 17% in pre-market trading after the company reported weaker-than-expected bookings for its second fiscal quarter and slashed the full-year forecast.
Take-Two reported a loss per share of $1.54 on revenue of $1.39 billion, missing the average analyst estimate that called for a profit of $1.38 per share on sales of $1.56 billion. Net bookings were reported at $1.5 billion, missing the $1.55 billion consensus.
For this quarter, the adjusted EPS is seen between $0.79 and $0.89, a big miss compared to the average analyst estimate of $1.41. Net bookings are seen between $1.41 billion and $1.46 billion, again below the $1.69 billion consensus.
Weak FQ3 guidance prompted Take-Two to cut its full-year forecast for net bookings from $5.8-5.9 billion to $5.4-5.5 billion. Analysts were looking for $5.91 billion in full-year bookings. The adjusted FY EPS is seen between $3.85 and $4.10, down from the prior outlook of $4.60 and $4.85, and below the average analyst estimate of $4.81.
“Our reduced forecast reflects shifts in our pipeline, fluctuations in FX rates, and a more cautious view of the current macroeconomic backdrop, particularly in mobile,” the company stated.
Morgan Stanley analyst Matthew Cost cut the price target to $150 per share from $190 after “mixed” results.
“We believe Zynga will likely remain an overhang until investors become confident that mobile gaming has bottomed. That said, we see the pipeline and longer term opportunity as intact,” Cost said in a client note.
Oppenheimer analyst Martin Yang took note of “one of the largest misses in recent years.”
“Overall, we believe results and outlook are heavily impacted by Apple ATT, which pressured in-app purchase revenues. It is harder for ZNGA and most other mobile publishers to target high-paying users. However, Rollic and its in-app advertising revenues outperformed, up mid-teens Y/Y,” Cost said.
By Senad Karaahmetovic