LOS ANGELES – Video game publisher Take-Two Interactive Software Inc. (TTWO) Tuesday posted a wider-than-expected quarterly loss and slashed its sales and earnings forecasts on disappointing game sales and changes to its game release schedule.
Shares in Take-Two fell more than 4 percent as the company's management admitted a mixture of poor planning and excessive optimism. Executives pledged better operations, tighter cost controls and a review of compensation throughout the company.
Take-Two slashed its forecasts for the current quarter and said it would follow a less hurried publishing schedule.
It did not specify which games were being delayed but said there were no changes to its plan to release "Grand Theft Auto: San Andreas (search)" in North America in October. The game, expected to be one of the best sellers of the year, is widely seen by the financial community as integral to the company's future.
The company also said some of its older titles did not sell as well as hoped in the latest quarter, though it did not single out specific titles.
On a conference call, analysts pressed the company aggressively on why it was again falling short of forecasts and what would be done to improve results.
"Clearly, this morning's remarkably poor earnings results and reduced guidance are yet another reflection of Take-Two's poor execution," Banc of America Securities analyst Gary Cooper said in a research note.
"However, we continue to maintain confidence that San Andreas will be the largest game of the year, with the potential to sell over 10 million units worldwide," Cooper said.
New York-based Take-Two reported a loss for the fiscal second quarter ended April 30 of $14.6 million, or 33 cents per share, compared with a year-earlier profit of $14.6 million, or 35 cents per share. Revenue fell to $153.4 million from $193 million.
The average forecast of analysts as polled by Reuters Estimates was a loss of 15 cents per share on revenue of $170.1 million.
For the current quarter, Take-Two forecast a loss of 28 cents to 33 cents per share on revenue of $130 million to $140 million. For the fiscal year ending in October it forecast a profit of $1.60 to $1.65 per share on revenue of $1.13 billion to $1.15 billion.
Analyst polled by Reuters Estimates had expected a profit of 14 cents a share on revenue of $189.4 million in the current quarter, and a profit of $1.98 a share on revenue of $1.16 billion for the fiscal year.
Take-Two said the revised forecast did not take into account an agreement it signed with Sega Corp. (search) to co-publish and distribute Sega's sports titles.
Shares of Take-Two were down $1.30 to $28.97 in morning trade on Nasdaq.