On April 10, Take-Two Interactive Software
- Foolish contributor Steven Mallas discusses Take-Two's potential turnaround in his earnings take.
- Revenue dropped by 22.5% to $205.4 million, but diluted earnings per share remained frozen at a loss of $0.71 year over year.
- Take-Two recently announced a restructuring plan that aims to reduce fixed overhead costs by $25 million by the end of fiscal 2008.
- Six titles will be released in Q3, including a game based on the movie Fantastic Four: Rise of the Silver Surfer.
- Take-Two Interactive hasn't quite had a turnaround with our community; it earns the lowest ranking, one star, in CAPS. The more prominent gaming companies like Activision
(NASDAQ:ATVI) and Electronic Arts(NASDAQ:ERTS) game on at four and three stars, respectively.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q2 2007 |
Q2 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$205.4 |
$265.1 |
(22.5%) |
|
Net Profit |
($51.2) |
($50.4) |
N/A |
|
EPS |
($0.71) |
($0.71) |
N/A |
|
Diluted Shares |
71.7 |
71.0 |
1.1% |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2007 |
Q2 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
22.3% |
6.7% |
15.6 |
|
Operating Margin |
(24.7%) |
(29.1%) |
4.4 |
|
Net Margin |
(25.0%) |
(19.0%) |
(6.0) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$108.5 |
$141.1 |
(23.1%) |
|
Accounts Rec. |
$70.4 |
$130.3 |
(46.0%) |
|
Inventory |
$80.2 |
$91.8 |
(12.6%) |
|
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$77.8 |
$108.2 |
(28.1%) |
|
Long-Term Debt |
N/A |
N/A |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
YTD 2007 |
YTD 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
($14.0) |
$42.6 |
N/A |
|
Capital Expenditures |
$13.1 |
$13.0 |
0.6% |
|
Free Cash Flow |
($27.1) |
$29.6 |
N/A |
Free cash flow is a Fool's best friend.
Related Foolishness:
- Take-Two's Quarter Not So Grand
- Foolish Forecast: Take-Two's Turnaround Game Plan
- SEC Takes on Take-Two
Both Activision and Electronic Arts have been recommended to Motley Fool Stock Advisor subscribers. For more entertainment companies with strong potential, try a free 30-day trial of the newsletter.
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