Take-Two's full-year revenue forecast hit by delay of 'Red Dead' game

[May 23, 2017]  (Reuters) - Take-Two Interactive Software Inc on Tuesday forecast full-year revenue well below analysts' estimates as it pushed out the launch of its highly anticipated Western action-adventure "Red Dead" videogame to spring 2018 from fall 2017.

The company's shares tumbled 10 percent in extended trading on Monday, after the announcement of the delay by Take-Two's Rockstar Games, the studio best known for creating the popular "Grand Theft Auto" franchise.

The stock was down 5.6 percent at $65.16 in premarket trading on Tuesday.

"...Red Dead Redemption 2 will be their first game created from the ground up for the latest generation of console hardware, and some extra time is necessary to ensure that they deliver the best experience possible," Chief Executive Strauss Zelnick said in a statement.

As a result, Take-Two forecast adjusted revenue would be between $1.42 billion and $1.52 billion in the year ending March 31, 2018. Analysts on average had estimated revenue of $2.23 billion, according to Thomson Reuters I/B/E/S.

Last year, Take-Two had teased the return of the "Red Dead" series in fall 2017, and analysts had expected the game to be one of the year's biggest releases. (http://bit.ly/2ebydh8)

"We attribute this slip to Rockstar's infamous perfectionism and don't think it changes the overall unit sales potential for the game," Jefferies' analysts said in a note.

Take-Two said it expects net sales to top $2.5 billion in its fiscal year starting April 2018, driven by "Red Dead Redemption 2" and a new title from its studio 2K, which makes the "Mafia" and "NBA" game franchises.

 A promotion for the computer game "Grand Theft Auto Five" is show in a Game Stop gaming story in Encinitas, California September 17, 2013. REUTERS/Mike Blake/File Photo

These games, including Rockstar studio's latest iteration of the "Grand Theft Auto" game boosted Take-Two's sales in the fourth quarter ended March 31.

The company said net revenue surged 51.5 percent to $571.6 million. Sales from the high-margin digital business jumped 43 percent to $278.7 million as more players switch to downloading games rather than buying physical game discs.

On an adjusted basis, the company reported net revenue of $407.1 million for the quarter, beating the average analysts' estimate of $355.4 million.

Net income rose to $99.3 million, or 89 cents per share, from $46.4 million or 48 cents per share, a year earlier.

Take-Two also forecast revenue of $240 million-$290 million for the quarter ending June 30, compared with analysts' estimates of $260.4 million.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Savio D'Souza)

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