Take-Two Ups Revenue Projections
Though this is not entirely Nintendo news, per se, since the following press release focuses mainly on the PS2-only “Grand Theft Auto: Vice City” and how much revenue it is pulling in for Take-Two. Anyway, if you want to read it and its brief reference to the GameCube its all below.
LOS ANGELES (Reuters) - Video game publisher Take-Two Interactive Software Inc. on Thursday posted sharply higher quarterly profits on the strength of its blockbuster “Grand Theft Auto: Vice City,” and raised its revenue forecast for the year.
Take-Two shares rose to a two-week high of $20.57 on the news before closing at $20.50, up 6.22 percent, on the Nasdaq. The stock has lost about 14 percent this year, after rising more than 45 percent in 2002 and outperforming its peers over that period.
“Vice City,” created for Sony Corp.’s PlayStation 2, was the best-selling video game in 2002, selling 8.5 million units worldwide since its launch. Its predecessor game, “Grand Theft Auto 3,” was the No. 2 title of 2002 after topping the 2001 charts.
“Vice City,” a criminal adventure game, features an expansive world where players can inflict various types of violence on others. The title has been widely criticized by family groups, politicians and even advocates for prostitutes, who object to the violence against them in the game.
Take-Two reported a net profit of $50.5 million, or $1.20 per share, including some restructuring charges, for the fiscal first quarter ended in January, compared with a year-earlier profit of $34.8 million, or 92 cents per share.
The average earnings estimate of analysts polled by Thomson First Call was $1.16 a share, with a range of $1.14 to $1.21.
Revenue surged to $408.8 million from $282.9 million in the year-ago period, surpassing the average First Call estimate of $357.9 million.
“They beat consensus and our higher-than-consensus numbers, even inclusive of some expenses that really are not typical-type expenses,” RBC Capital Markets analyst Stewart Halpern told Reuters.
For the current quarter, the New York company said it still expects earnings of 34 cents a share on sales of $190 million. For the full fiscal year, the company raised its forecast to earnings of $2.26 a share on revenue of $970 million.
Analysts surveyed by First Call, on average, expect earnings per share of 35 cents on revenue of $191.9 million in the second quarter. For the full year they expect earnings per share of $2.22 on revenue of $955.6 million.
CHARGES FOR WAREHOUSES, GAMES
Take-Two said it closed distribution warehouses in two cities during the quarter, at a recorded cost of $7.4 million.
The company also said it took some charges to write down products in development, including $5.5 million related to the game “Duke Nukem,” which has been in development for years and as yet has no prospective launch date.
“While the team is vigorously working on the game, the risks associated with the extended development time caused us to reevaluate the carrying value of this property,” Take-Two’s new chief executive, Jeffrey Lapin, said on a conference call.
RBC Capital’s Halpern said the company’s success gave it the leeway to take the write-down.
“It seems to me that, cutting through it all, the magnitude of earnings that they are currently experiencing kind of gives them the opportunity to err on the side of writing down more,” he said.
Sony and its competitors, Microsoft Corp. and Nintendo Co. Ltd., are widely expected to cut the price of their consoles by as much as $50 around the time of the industry’s major trade show in May. Such cuts would take the price of the PS2 and Microsoft’s Xbox to $149 and Nintendo’s GameCube to $99.
Lapin said that if the three game console makers cut prices before May the industry could grow by 15 to 20 percent this year.
Take-Two also cut the price of “GTA3” to $29.99 from $49.99.
Source: http://www.reuters.com
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