Take-Two Restates, Reports Loss

Shares of Take-Two were off 30 cents, or 1.7%, to $17.50 in extended trading.

Net loss for fiscal 2006 was $184.9 million, or $2.60 a share, compared with net income of $35.3 million, or 50 cents a share, in 2005. Revenue was $1.04 billion, a drop from $1.2 billion in fiscal 2005.

The fiscal 2006 results include a noncash charge of $63.5 million, or 89 cents a share, primarily incurred during the third quarter to record valuation allowances for deferred tax assets.

Fiscal 2006 performance reflected higher development costs for its next-generation titles and the company's continued investment in building its sports business, the company said.

For the first quarter ended Jan. 31, Take-Two expects revenue in the range of $265 million to $275 million, with an EPS loss in the range of 33 cents to 35 cents, reflecting no tax benefit.

For the full fiscal year 2007, revenue is expected to be between $1.2 billion and $1.25 billion.

Take-Two said it expects to return to profitability in the fourth quarter and break-even for the full fiscal year 2007. The company also expects its 2K Sports division to be profitable in calendar year 2007.

Separately, the company said it has appointed Seth Krauss as executive vice president and general counsel, effective Mar. 12. Krauss was previously at Morgan Stanley, where he served as an executive director in the legal and compliance division.