Take-Two Again Hurt By Lack of New GTA Game in Q3, Swings to Loss
The lack of a new Grand Theft Auto game again took a toll on Take-Two Interactive in Q3 ended July 31, as it swung to a $55.5 million loss, 72 cents per share, from a $51.8 million, 67 cents, profit in Q3 last year. But the loss was smaller than expected, and Take-Two said it settled a class- action suit by shareholders in exchange for a payment of $20.1 million.
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Of the settlement, $15.2 million will be paid by the company’s insurance carriers, while $4.9 million will be paid by Take-Two, it said. Take-Two fully accrued for its portion of the settlement costs over several quarters ended April 30, it said. The company also agreed “to supplement the substantial changes that it has already implemented in its corporate governance policies and practices” to settle the suit, it said. But it said the settlement is subject to the completion of final documentation and preliminary and final court approval.
The company’s Q3 revenue tumbled to $138.6 million from $433.8 million in Q3 last year, when it benefitted from the post-launch performance of Grand Theft Auto IV, it said. Top-selling Q3 games were Grand Theft Auto IV, The Bigs 2 and Major League Baseball 2K9, it said. It wasn’t immediately clear how many units of those games were sold in Q3.
“The economy and retail environment continue to be challenging,” Chairman Strauss Zelnick said in a written statement. For Q4, it expects to report sales of $350-375 million and non-GAAP earnings per share of 30-35 cents. For the fiscal year, it expects to report sales of $975 million- $1 billion and a non-GAAP loss of 81-87 cents.
Take-Two’s coming game releases will include several new Grand Theft Auto titles and its latest NBA 2K basketball game, said CEO Ben Feder. Also coming is Borderlands, a new intellectual property, he said.