Earnings: Take-Two's Losses Grow; Settles 'Hot Coffee' Suit For $20 Million
Game publisher Take-Two Interactive (NSDQ: TTWO) is struggling to evolve into more than just a one-franchise company — but without a Grand Theft Auto release to pump up sales, it continues to lose money.
It posted a 72-cents per share, $55.5 million loss for Q309; that’s in contrast to a 67-cents per share, $51.8 million profit in Q308, but also a bigger loss than in the previous quarter. Revenue was also down sharply year-over-year and sequentially.
The poor performance disappointed investors, who sent the stock down by about 3 percent in after-hours trading — though Take-Two’s sales actually beat analysts’ expectations by about $8 million.
| 3Q 2009 | 3Q 2008 | Analysts Estimates For 2009 | |
|---|---|---|---|
| EPS | -$0.72 | $0.67 | -$0.65 to -$0.75 |
| Net Income | -$55M | $51.8M | NA |
| Revenue | $138M | $433.8M | $120M – $130M |
– Out from the shadow of “Hot Coffee”: Take-Two was rocked by scandal in mid-2005 when a sexually-explicit mini-game was discovered in then best-seller Grand Theft Auto: San Andreas. Part of the problem stemmed from the company’s insistence that the scenes were only accessible if gamers actually modified the game’s original code; opponents alleged that the sex scenes had been included from the start.
In addition to harsh words from politicians and a class action suit filed by consumers that purchased the game for minors, Take-Two also faced a consolidated securities suit filed by investors. The company announced today that it settled the consolidated securities suit for just over $20 million — of which it will pay about $5 million. The balance will be paid by its insurance carriers. Take-Two said it already accrued for its portion of the payout in previous quarters.
Good article but it seems that most stocks disappointed most investors in 2009. Although, if they had a web 2.0 marketing strategy rather than dumping their money into traditional advertising Take-two might have done better.