Take-Two posts Q1 losses, beats analyst's expectations

Beleaguered publisher Take-Two interactive has posted its Q1 financial report, revealing significant revenue losses, but faring marginally better than both the company's own guidance and recent analyst predictions.

Net sales for the quarter were posted at USD 265 million (EURO 222.5 million), compared to sales of USD 502.5 million (EURO 421.9 million) for the same period a year prior. The previous year's figures included holiday sales of the company's flagship title, Grand Theft Auto: San Andreas, and the company has also laid blame for its substantially weaker 2006 sales on a continuing soft market during the current console hardware transition.

Net loss for the quarter was USD 29.1 million (EURO 24.4 million), compared to a net income of USD 55.2 million (EURO 46.3 million) a year prior. Whilst clearly a disappointing quarter for the troubled firm, the figures are higher than Take-Two's guidance of USD 230-250 million (EURO 193-209 million) and the estimates of Wedbush Morgan reported recently.

Paul Eibeler, Take-Two CEO, commented: "We are working to manage through the console transition, while positioning Take-Two for future opportunities. We're taking a hard look at every aspect of our business and are balancing the need to manage expenses while investing in creative resources and the infrastructure needed to support our diversification efforts."

"Most importantly, we will continue to focus our development resources on creating great content and further leveraging our proprietary brands. Our commitment to quality products for current and next generation systems is critical to further strengthen Take-Two for the opportunities we see in 2007 and 2008," he added.

Strong sales during the quarter were reported for Grand Theft Auto: Liberty City Stories, which was the number one selling PSP title in the U.S. every month since its October 2005 launch, and budget priced Grand Theft Auto: San Andreas for the PlayStation 2 continues to sell well for the firm. Take-Two's subsidiary, 2K Games noted positive sales for Sid Meier's Civilization IV on PC and NBA 2K6 for the Xbox 360 console.

The company has a significant number of new releases planned for the remainder of the fiscal year, which ends October 31st, including Rockstar's recently announced Table Tennis for Xbox 360, the controversial Bully for PS2 and Xbox, a couple of PSP titles which includes an all-new GTA game, Prey for the Xbox 360 and PC, and a slew of additional current and next-gen titles. Take-Two has stated that it expects to return to profitability in its fourth quarter, although analysts remain cautious at this stage.