Take-Two Drops Despite Strong Holiday Quarter

Take-Two topped analyst earnings and revenue estimates, as well as guidance for the current quarter.
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Shares of video game maker Take-Two Interactive Software  (TTWO) - Get Report were falling after hours Monday despite the company beating top and bottom line estimates for the fiscal third quarter, as well as guidance for the current quarter.

The New York-based company reported quarterly revenue of $860.9 million on GAAP earnings of $1.57 per share. Analysts were expecting the company to report revenue of $757 million and GAAP earnings of $1.12 per share. 

"Due to an incredibly strong holiday season, coupled with our ability to provide consistently the highest quality entertainment experiences, especially as many individuals continue to shelter at home, Take-Two delivered operating results that significantly exceeded our expectations,” said CEO Strauss Zelnick. 

The company also issued fiscal fourth quarter revenue guidance of between $702 million and $752 million on earnings between 88 cents and 98 cents per share. 

Analysts are expecting revenue of $578.92 million on earnings of 42 cents per share. 

However, Take-Two shares were down 4.1% to $204.60 per share at last check after the stock closed Monday's session up 2.8%. Over the last 12 months, shares are up 81% compared to the Nasdaq's 47% rise over the same time period. 

This quarter, the company expects three major game releases, but the big release is the latest entry in the company's Grand Theft Auto series. Grand Theft Auto V is slated for release on the PS5 and Xbox Series X in fiscal 2022. 

In December, the company's bid for U.K.-based Formula 1 video game maker Codemasters was topped by rival Electronic Arts  (EA) - Get Report; that deal was approved by shareholders this week. 

Last week, EA fell after reporting earnings and revenue beats for the December quarter, but weak guidance for the current quarter. Meanwhile Activision Blizzard  (ATVI) - Get Report jumped following its December quarter beats. The company also reported current quarter earnings and sales guidance ahead of expectations.

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