Take Two Interactive rides Grand Theft Auto to the bank
This week, video game company Take Two Interactive, the name behind popular franchises Grand Theft Auto and Red Dead Redemption, released earnings results for the first quarter of 2018. Grand Theft Auto is a bright spot for the company again, as its new online version proves to be as popular as its older console releases. Investors held modest hopes that Take Two, which has seen its share price soar this year, would deliver some positive figures. But yet again, the company blew those hopes out of the water, as its flagship franchise outperforms investors’ wildest dreams.
Take Two outperformed so much that its share price rose by 13% following the earnings release
SOURCE: Yahoo Finance
Take Two’s performance last quarter was incredible: net sales jumped by 28% to $348.3 million. Compare that with the consensus estimate of 3% growth, and it’s easy to see just how much better Take Two has done than expected. The company also reported net income of $60.3 million, or $0.56 per share. This was triple the amount that analysts forecast for the quarter.
The major contributors to this spectacular haul were Take Two’s big name franchises, which have continued to sell well: Grand Theft Auto, NBA 2K17, and WWE. These games also contributed to the rising sales in digitally delivered content, showing that Take Two’s operation is becoming more modern and more efficient each quarter.
Strauss Zelnick, Take Two’s CEO, said: “fiscal 2018 is off to an excellent start, with our business’ positive momentum continuing to exceed our expectations in the first quarter.”
Understandably, the company expects big things from the rest of 2018. Zelnick also said that fiscal 2019 could be a “record year” for revenue and operating cash flow, as the next Red Dead Redemption and 2K games make an appearance. The company’s share price has soared following results, and is now up almost 90% this year.
Dominion holds Take Two Interactive in its Global Trends Ecommerce Fund.
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