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‘Grand Theft Auto’ Video Game Maker Slays Q3 Targets

Video game publisher Take-Two Interactive Software (TTWO) late Tuesday murdered Wall Street’s fiscal third-quarter targets thanks to hot games like “Mafia 3″ and the continued success of the “Grand Theft Auto” franchise.

The New York City-based company earned 99 cents a share excluding items, up 11% year over year, on adjusted sales of $745 million, up 53%, in the December quarter. Analysts polled by Thomson Reuters expected Take-Two to earn 96 cents a share on sales of $706 million.

For the current quarter, the company’s fiscal Q4, Take-Two said it expects to earn 53 cents a share ex items on adjusted sales of $342 million, based on the midpoint of guidance. Analysts were modeling for 53 cents EPS and $291 million in sales for the March quarter.

Take-Two stock was up 1%, above 54, in early trading on the stock market today. Take-Two broke out of a flat base with a buy point of 46.88 on Nov. 3.

IBD’S TAKE: Take-Two Interactive Software has an IBD Composite Rating of 71, meaning it has outperformed 71% of stocks in key metrics over the past 12 months. But it ranks No. 4 out of 15 companies in IBD’s Computer Software-Gaming industry group. To see which companies lead the group, visit the IBD Stock Checkup.

Under generally accepted accounting principles (GAAP), Take-Two lost 33 cents a share in the December quarter, compared with a year-earlier loss of 51 cents.

The largest contributors to Take-Two’s revenue growth last quarter were “Grand Theft Auto 5″ and “Grand Theft Auto Online,” “WWE 2K17,” “NBA 2K17″ and “Sid Meier’s Civilization 6,” the company said.

“Take-Two had a highly successful holiday quarter,” Take-Two CEO Strauss Zelnick said in a conference call with analysts. “Consumer demand for our new releases and catalog was strong throughout the period and players continue to engage significantly with our games after purchase.”

“Grand Theft Auto 5″ and “Grand Theft Auto Online” continue to outperform expectations, he said. “GTA 5″ has sold more than 75 million units since its launch in September 2013.

Crime saga game “Mafia 3,” released Oct. 7, has sold about 5 million units to date.

Take-Two received at least seven price-target hikes from investment banks after reporting Q3 results. Firms raising their price targets on Take-Two stock included Baird, Benchmark, Cowen, Macquarie Capital, Mizuho Securities, Oppenheimer and Piper Jaffray.

Take-Two is the second of three major U.S.-traded video game publishers to report holiday quarter results. Electronic Arts (EA) on Jan. 31 reported fiscal Q3 sales and earnings that beat expectations. Activision Blizzard (ATVI) is scheduled to release its fourth-quarter results after the close on Thursday.


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