Take-Two Posts Mixed Q3 Results; Shares Sink More Than 2%

Video game developing company Take-Two Interactive Software, Inc. (NASDAQ: TTWO) recently reported mixed results for its third quarter ended December 31, 2021, as earnings topped but net bookings missed estimates.

Following the earnings, shares of the company declined more than 2% to close at $171.55 in Monday’s extended trading session.

Revenue & Earnings

Take-Two’s quarterly net bookings stood at $866.1 million at the end of the quarter, up 6.4% from the same quarter last year. However, the figure failed to surpass the consensus estimate of $888.17 million. The year-over-year growth in quarterly net bookings was primarily driven by a 3.2% year-over-year increase in console net bookings, which comprised 72% of the total net bookings during the quarter.

The company reported quarterly earnings of $1.24 per share, down 21% year-over-year. The earnings, however, surpassed the consensus estimate of $1.20 per share.

Outlook

For the fourth quarter of 2022, Take-Two forecasts net booking to be in the range of $3.37 billion to $3.42 billion, while it expects net revenue and net income in the range of $3.41 billion to $3.46 billion and $361 million to $373 million, respectively.

Management Commentary

The CEO of Take-Two, Strauss Zelnick, said, “Fiscal 2022 is shaping up to be another strong year for Take-Two, and we are once again raising our Net Bookings guidance for the year to $3.37 billion to $3.42 billion.

“We remain highly optimistic about the future of the interactive entertainment industry and our multi-year growth trajectory. From investing in talent to acquiring some of the industry’s leading creative studios and announcing our transformational agreement to combine with Zynga, we are taking exciting steps to diversify our business, gain market share and enhance our positioning as one of the world’s top three pure-play publishers of interactive entertainment.”

Stock Rating

Consensus among analysts is a Strong Buy based on 11 Buys and 3 Holds. The average Take-Two stock prediction of $201.93 implies upside potential of 15.3% from current levels. Shares have declined 17.9% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Take-Two’s performance this quarter.

According to the tool, the Take-Two website recorded a 41.12% monthly fall in global visits in December, compared to the same period last year. Further, year-to-date, the website traffic has decreased 43.88%, compared to the previous year.

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