Take-Two drives goals with 'Auto'
Company looks to 'GTA IV' to be huge hit
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On a conference call with analysts Tuesday, the "Grand Theft Auto" publisher said it hasn't held any further talks with EA since last month's $2 billion buyout offer, which the Take-Two board dismissed as inadequate.
Executive chairman Strauss Zelnick said Take-Two remains open to talking about a potential acquisition after "Grand Theft Auto IV" is released April 29 but EA has rejected that option.
Odds that EA will increase its bid, or another buyer, such as a major media conglom, will offer a higher price, lengthened Monday as two mutual funds that are among Take-Two's largest shareholders sold off most of their stake, according to Reuters. That indicates they don't think Take-Two shares are likely to increase in value beyond the $26 range where they have been trading since EA made its bid.
Though EA's bid remains on the table, there's no sign yet of how the two companies could come to an agreement. Zelnick reiterated his position Monday that "(EA's offer) was substantially lower than the values accorded comparable companies and creative assets by EA and the market as a whole."
Take-Two reported a 13% drop in revenues for the quarter ending Jan. 31 to $240.4 million. That's better than expected, as a drop was certain since the publisher didn't release any major new titles in the quarter. Perf was driven by sales of previously released hits like "Bioshock," which has sold more than 2 million units and has a sequel set for release in fall 2009, along with "Carnival Games" "NBA 2K8" and "Grand Theft Auto" titles.
Net loss was $38 million, up from $21.5 million. Though that was better than expected, Take-Two still remains unable to turn a profit in periods when it hasn't recently released a new "Grand Theft Auto" game.
Such a period comes next month, when "GTA IV" arrives and is expected to be a huge hit. Take-Two said Monday that pre-orders are already tracking higher than expected. That was one factor in it hiking the lower end of its revenue guidance for the current fiscal year, ending Oct. 31, from $1.1 billion to $1.25 billion. The upper limit remains at $1.4 billion. Earnings-per-share expectations rose from between $1.30 and $1.50 to $1.35 and $1.55.
Take-Two stock fell slightly to $24.65 before earnings were announced. In after-hours trading, they were up 3%.
