Earnings: Legal Fees Send Take-Two's Losses Higher
This story was written by Tameka Kee.
Looks like that battle to fend off EA had far-reaching costs for Take-Two (NSDQ: TTWO). The video game publisher posted a $50.4 million ($0.66 per share) net loss for its fiscal Q1, more than a third higher than its $38 million ($0.52 per share) loss last year, and up dramatically from its $15 million loss the previous quarter. The company attributed the ballooning losses to "higher marketing, legal, and research and development expenses"noting that the legal fees could continue to mounteven though getting all of its legal troubles wrapped up was a priority.
Restructuring and legal costs: There's a laundry list of legal issues related to the EA deal, including an FTC subpoena Take-Two tried to fight last June, and the company has already paid out more than $11 million to strategic advisors. Take-Two also said it's still facing repercussions from its stock back-dating charges in 2007, including payouts of overturned board members.
Revenues were up: Take-Two's Q1 revenues came in at $256.8 million, up 6.8 percent from $240.4 million last year. The company said sales of GTA IV, Carnival Games, NBA 2K9 and Midnight Club: Los Angeles fueled the growth; the Street was actually expecting revenue to contract, per MarketWatch. But the company's guidance for the coming quarter was much lower than analysts expectations: Take-Two projected revenues of $200-$220 million, with a $0.10-$0.20 per share loss; analysts expected more than $260 worth of revenue and a gain of $0.03 per share. Release.
By Tameka Kee