Take-Two Brass Flagged for Delay of Game

Revenue for the full year ending Oct. 31, is now expected to be the range of $950 million to $1billion with an EPS loss in the range of $1.25 to $1.35. Analysts were expecting revenue of $1.22 billion and EPS loss of 30 cents.

Competitors including Electronic Arts>(ERTS Quote - Cramer on ERTS - Stock Picks) and Activision(ATVI Quote - Cramer on ATVI - Stock Picks) will likely benefit from consumer dollars soon shifting in their favor.

Shares of EA closed Friday off 3%, to $50.04; Activision added 3%, to $18.84.

The delay, a disappointment to investors who were counting on change at the company, is unlikely to convince skeptics to sign on to Take-Two.

"I have avoided Take-Two because the company has been in turmoil some time now," and even with new management, "it doesn't seem like some of big problems around the company are being fixed," says Dan Ahrens, portfolio manager with the Ladenburg Thalmann Gaming and Casino Mutual Fund, which does not own shares of Take-Two, but has a position in competitors EA and Activision.

Stealing the Show

Ahrens says Take-Two is excessively reliant on the Grand Theft Auto franchise, and the news of the delay should serve as a red flag to investors who might have wanted to bet on it.

"This is a major snafu on Take-Two's part," Kauffman Bros analyst Todd Mitchell said in a report. "We think it is going to alienate some fans as well as their investors." Kauffman makes a market in Take-Two.

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