Take-Two Crushed on Guidance, CEO Resignation

Updated from 9:12 a.m. EDT

Take-Two Interactive ( TTWO) forecast an unexpected loss in its second quarter and announced the resignation of its chief executive, one month after its chairman quit and the SEC said it was considering civil charges against the company and several officers.

The video-game maker expects to lose 15 cents a share on revenue of $170 million in the quarter ending April 30, citing a delay in the release of its Red Death Revolver title. Analysts surveyed by Thomson First Call had been forecasting earnings of 33 cents a share on revenue of $219.7 million in the quarter.

The company said Jeffrey Lapin resigned as chief executive, to be replaced on an interim basis by its current executive chairman, Richard Roedel. Roedel was appointed chairman last month following the resignation of its founder, Ryan Brant. Take-Two also reappointed Paul Eibeler president, a post he held between 2000 and 2003, and named Gary Lewis chief operating officer. Lewis had been managing director of its international division.

Investors, who bid the stock up when Brant stepped down March 15, were less generous about Wednesday's news: The stock was down $4.80, or 13.6%, to $30.40 on the Instinet premarket session.

Take-Two now expects to release Red Death Revolver for PlayStation2 and Xbox in the first weekend in May. It also cited lower-than-expected sales of older products, a trend that occurred despite more spending on sales support and discounts. The company also moved back the launch date of its Warriors game for PlayStation2 to the first quarter of 2005 from the third quarter of 2004. The move will allow it to devote additional resources to the next release of its flagship Grand Theft Auto game, which is scheduled to be in North American stores Oct. 19.

The company reiterated third-quarter guidance for earnings of 12 cents to 17 cents a share on revenue of $180 million to $200 million, and lowered full-year guidance to earnings of $2 a share on revenue of $1.17 billion. Analysts surveyed by Thomson First Call were forecasting earnings of 15 cents a share on revenue of $191.7 million for the third quarter and earnings of $2.44 a share on revenue of $1.20 billion for the full year.

Take-Two said in March that Brant and another unidentified employee were among those who were notified by the SEC that the agency was considering civil charges, following a two-year-old review of the company's accounting.

More from Technology

Apple's Next $10 Billion Frontier Is Content Creation

Apple's Next $10 Billion Frontier Is Content Creation

Intel Gets a Downgrade Following CEO Resignation

Intel Gets a Downgrade Following CEO Resignation

How to Play Nvidia and Intel on a Trade War With China

How to Play Nvidia and Intel on a Trade War With China

Trump Puts Tech in Trade War Crosshairs With Planned Curb on China Investment

Trump Puts Tech in Trade War Crosshairs With Planned Curb on China Investment

These 5 Tech Giants Still Aren't That Expensive

These 5 Tech Giants Still Aren't That Expensive