Updated from 4:46 p.m. EDT
Scalded by "hot coffee," Take-Two Interactive (TTWO - Get Report) poured some cold water on investors on Tuesday: missing analysts' earnings estimates, lowering its full-year guidance and offering a disappointing outlook for 2006.
While the fiasco involving explicit sex scenes in its latest Grand Theft Auto game tarnished the just-completed quarter, increased costs and delayed products are expected to weigh on coming periods.
Despite the bad news, Take-Two officials touted the company and its future on a conference call."We are confident about our position in the industry and in the marketplace," said company CEO Paul Eibeler on the call. "We believe Take-Two's prospects have never been better." Investors seemed to have a different opinion though. In after-hours trading following Take-Two's earnings release, the company's stock was trading off $1.52, or 6.3%, to $22.64. And in terms of Take-Two's financial results, things certainly have been better. In its fiscal third quarter ended July 31, the video-game software company lost $28.8 million, or 41 cents a share. In the same period a year earlier, in contrast, the company lost $14.4 million, or 21 cents a share. Sales rose 5.6% to $169.9 million. Analysts polled by Thomson First Call were expecting Take-Two to lose 38 cents a share in the quarter on sales of $175.6 million. Warning that it would not meet previous financial expectations for the quarter, the company in July