Take-Two Beats the Street, But Loss Still Widens

While Take-Two Interactive [TTWO] executives are glad it beat Wall Street  estimates for its Q1, there will be no celebrating at its downtown New York headquarters anytime soon as long as it’s still in the red.

The company posted a net loss of $50.4 million, or 66 cents per share on revenues of $256.8 million for the quarter, which ended January 31. That compares to a net loss of $38 million, or 52 cents per share on revenues of $240.4 million in the previous year’s Q1. Wall Street was expecting a loss of 73 cents per share.

Take-Two attributed the loss partly due to $6.2 million in stock-based compensation as part of its management agreement with Zelnick Media, which pays CEO Ben Feder. The company also incurred expenses due to “unusual legal matters” related to the attempted hostile takeover last year by Electronic Arts [ERTS] as well as governmental inquiries and civil lawsuits.

“Looking to the balance of the year, the economy remains challenging and uncertain, and our industry will not be immune to this environment. Consumers will be highly selective in their purchases, including interactive entertainment,” said Chairman Strauss Zelnick.

Thanks in large part to the PC release of Grand Theft Auto IV, most of Take-Two’s revenue—24 percent—came from that platform. On consoles, Wii provided the company with 19 percent of its revenue, compared to 18 and 15 percent on Xbox 360 and PlayStation 3, respectively.

For the rest of the fiscal year, which ends on October 31, the company will release new titles in some of its most popular franchises. Notable releases will be Bioshock 2 (platforms unannounced, but count on PC, 360 and PS3), Grand Theft Auto: Chinatown Wars (DS), Grand Theft Auto: Second Episode (360, working title), Mafia II (PC, 360, PS3), NBA 2K10 (multiplatform), Red Dead Redemption (360, PS3) and The Bigs 2 (multiplatform).