Shares of Take-Two Interactive Software Inc (NASDAQ:TTWO) were surging Thursday after the video game maker posted impressive first-quarter results.
As of 10:55 a.m. EDT, the stock was up 11%.
The Grand Theft Auto-maker aggressively lifted its guidance for the year, and reported strong growth on the top and bottom lines. Net sales increased 28% in the period to $348.3 million, which crushed estimates at $281.4 million. Digitally delivered net revenue increased 56% to $268.2 million, and recurrent consumer spending was up 72%.
Earnings per share, meanwhile, flipped from a loss of $0.46 a year ago to a gain of $0.57, easily beating estimates at $0.40, as performance was boosted by games like NBA 2K17, Grand Theft Auto V, and Grand Theft Auto Online and gross margin surged.
CEO Strauss Zelnick said, "Fiscal 2018 is off to an excellent start, with our business's positive momentum continuing to exceed our expectations in the first quarter."
Looking ahead, the company upped its full-year net sales forecast from $1.42 billion-$1.52 billion to $1.65 billion-$1.75 billion, which was also ahead of the analyst consensus of $1.54 billion.
Zelnick said strong growth would continue through fiscal year 2019 as the company launches Red Dead Redemption 2 and a highly anticipated title from a 2K franchise. Video-game stocks have been flying higher in recent years as Take-Two is now up more than 300% over the last three years. With the industry tailwinds and a strong slate of launches ahead, I'd expect the stock to continue to outperform.