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Take-Two's Loss Widens

Priya Ganapati

SAN FRANCISCO -- Video games publisher Take-Two Interactive(TTWO - Cramer's Take - Stockpickr) reported wider loss in the first quarter but offered a robust outlook for the fiscal year based on the expected strong sales of its upcoming game Grand Theft Auto IV.

The company also announced that it is working on a sequel to its recent hit BioShock that has sold more than 2 million copies since its release in August. BioShock 2 is being prepared for release in fiscal 2009.

Last month, Take-Two rejected a $2-billion, or $26 a share, unsolicited bid by Electronic Arts(ERTS - Cramer's Take - Stockpickr) for the company saying it was inadequate. Take-Two said it will revisit the offer after the April 29 release of its Grand Theft Auto IV game, widely expected to the biggest blockbuster of the year.

On a conference call with analysts Tuesday, Take-Two said it has no further update on the EA's offer.

For the first quarter, Take-Two reported a loss of $38 million, or 52 cents a share, widened from a loss of $21.5 million, or 30 cents a share, a year ago.

Excluding charges, it reported a loss of $30.3 million, or 41 cents a share, compared with a loss of $10.3 million, or 14 cents a share, the year before.

Net revenue for the first quarter fell to $240.4 million from $277.3 million a year ago. The company attributed the decline in revenue to more new game releases in last year's holiday season.

Analysts were expecting a loss of 51 cents on revenue of $211.15 million in the quarter.

Shares of Take-Two were up 65 cents, or 2.6%, to $25.30 in recent extended trading.

For the second quarter, Take-Two forecast revenue in the range of $450 million to $500 million and EPS, excluding charges, of $1 to $1.10 a share.

Analysts polled by Thomson Financial estimate the company will post revenue of $462.77 million and earnings of $1.02 a share in the second quarter.

For the fiscal year, Take-Two said it expects revenue to range between $1.25 billion to $1.4 billion and EPS, excluding charges, between $1.35 to $1.55. Analysts are expecting revenue of $1.35 billion and EPS of $1.35.

The company's first-quarter loss included $6.1 million in stock-based compensation expense (8 cents a share) and $1.7 million in expenses related to unusual legal matters and business reorganization costs (2 cents a share).

Results for the first quarter of 2007 included $4 million in stock-based compensation expense (6 cents a share) and $7.2 million in legal expenses (10 cents a share).