On second thought, Take-Two Interactive
Take-Two delivered a sluggish end to what started out as a stunning fiscal year, and then made things worse by thoroughly hosing down its prospects for fiscal 2009.
Revenue climbed 11% to $323.4 million in its fiscal fourth quarter. The reported deficit doubled to $0.20 a share, but several legal charges and a business reorganization hit are baked into those numbers. Strip those out, along with stock-based compensation, and one arrives at earnings on a non-GAAP basis of $0.02 a share for the quarter and $2.08 a share for all of fiscal 2008.
Grand Theft Auto IV was the company's blockbuster title this year, though recent leaders in its release library include Midnight Club: Los Angeles, the NBA 2K9 basketball game that has given EA Sports some worthy competition, and additions to the Carnival Games franchise that have sold briskly on Nintendo's (OTC BB: NTDOY.PK) Wii.
Now let's bite down hard on the bullet, because fiscal 2009 won't be pretty. Take-Two sees revenue falling by 19% to 28% this new fiscal year, with non-GAAP profits clocking in between breakeven and $0.20 a share.
Wall Street figured that 2009 would be a challenge for the company, given the 2008 success of GTA4. The pros just never figured it would be this bad. Analysts were only looking for a 10% top line swoon, with projected profitability at a now laughable target of $1.26 a share.
Releases on the company's 2009 slate showcase the industry's gradual shift to digital distribution. A pair of GTA4 episodes will be available exclusively as downloads on Microsoft's
If you keep putting in bigger hard drives, console makers and companies like Take-Two will find ways to fill them up.
Take-Two is certainly not the first gaming company to spook investors. EA and THQ
That should give the industry hope.
Other games to play: