Videogame publisher Take-Two Interactive posted a Q2 earnings loss that beat expectations, but sales dropped from a year ago. This marked Take-Two's sixth consecutive quarterly loss. The company also announced a restructuring plan designed to reduce fixed overhead expenditures by $25 million by the end of fiscal 2008 and consolidate marketing, sales and operational functions. The company expects to take $15 million in charges connected to the restructuring through fiscal 2008. The fiscal Q2 net loss came in at $51.2 million (-$0.71/share) versus a loss of $50.4 million (-$0.71) a year ago. Excluding costs, Take-Two posted an EPS loss of -$0.41, ahead of consensus expectations of -$0.57. Revenue was down 22.5% to $205.4 million from $265.1 million last year. Analysts had forecast revenue of $204.5 million. This is Take-Two's first earnings report after a corporate shakeup that removed former CEO Paul Eibler and CFO Karl Winters and installed CEO Ben Feder and Chairman Strauss Zelnick. The company is reiterating its fiscal 2007 guidance of revenue of $1.2-1.25 billion and break-even results on a GAAP basis. Shares rose 1.5% following the report.
Sources: Reuters, TheStreet.com, MarketWatch, 24/7 Wall Street
Commentary: Take Two Crosses Its Fingers and Toes For Blockbuster Q4 • Take Two Announces Restructuring Plan • Take-Two Interactive: Buying Puts is Too Obvious
Stocks/ETFs to watch: Take-Two Interactive Software, Inc. (NASDAQ:TTWO). Competitors: Activision Inc. (NASDAQ:ATVI), Electronic Arts Inc. (ERTS). ETFs: iShares Goldman Sachs Software Index Fund (NYSEARCA:IGV), Software HOLDRS Trust ETF (NYSE:SWH), PowerShares Dynamic Software (NYSEARCA:PSJ)
Conference call transcripts: F2Q07
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