Take-Two Interactive Software Inc breezed past expectations as sales of its hit sports game NBA 2K11 helped it weather a year without a new version of its blockbuster franchise Grand Theft Auto.
Take-Two Interactive shares rose 6 percent in after-hours trading on the Nasdaq on Thursday.
The company reported net income of $53.8 million, or 58 cents a share, in its quarter ended October 31. In the same period a year ago, the company posted a loss of $23.5 million, or 30 cents a share.
On an adjusted basis, the company posted net income of 67 cents per share, beating analysts' estimates of 31 cents, according to Thomson Reuters I/B/E/S.
They are blowing out expectations, said Janco Partners analyst Mike Hickey.
This year marked the first time the company has been profitable in nearly a decade without the release of a new Grand Theft Auto game.
The company attributed the improved results, including an increase in revenue of 32 percent to $373.7 million, to brisk sales of its the company's basketball game, NBA 2K11.
The game was the top-selling console video game in October and remained a top-ten selling game in November, according to retail tracking firm NPD.
We're proud that we've not only delivered profitability, but we've delivered profitability in our sports business, said the company chairman Strauss Zelnick in an interview.
A STRONG YEAR
Take-Two's shares have outperformed those of its bigger rivals in the United States in 2010, but the volatile video game sector has not been a favorite of investors over the past few years.
The company competes with Electronic Arts Inc and Activision Blizzard Inc.
For the quarter, analysts were looking for revenue of $325.23 million, according to Thomson-Reuters I/B/E/S.
The company, which is changing its fiscal year to end March 31, expects to post earnings per share on a non-GAAP basis of 25 to 35 cents in the three months ended December 31. Revenue for the period will likely range between $290 million and $315 million.
For the year ended in March 2011, Take-Two expects a profit excluding items of 50 cents to 65 cents a share on revenue of $1 billion to $1.1 billion. This is above the forecast of 47 cents a share on revenue of $1 billion by Arvind Bhatia, analyst at Sterne Agee.
Bhatia said investors are looking ahead to Take-Two's fiscal year 2012, when he expects a new edition of Grand Theft Auto to be released and when there will be no overlapping months because of changes to its fiscal calendar.
Zelnick did not provide details on when the next Grand Theft Auto, would be coming out.
Take-Two shares closed at $11.94, down 0.5 percent, on the Nasdaq on Thursday.
(Reporting by Liana B. Baker; editing by Tim Dobbyn, Matthew Lewis and Andre Grenon)