Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What's happening: Shares of Take-Two Interactive Software (NASDAQ:TTWO) were up 15.2% as of 11 a.m. Tuesday after the video game developer reported mixed fiscal-fourth-quarter 2015 results and impressive current-quarter guidance.
Adjusted quarterly revenue -- which notably accounts for deferred revenue -- rose 83% year over year to $427.7 million, which translated to a 153% increase in adjusted net income to $54.3 million, or $0.49 per diluted share. Analysts, on average, were anticipating adjusted revenue of $458.9 million, and net income of $0.27 per share.
For the current quarter, Take-Two expects adjusted revenue of $325 million to $350 million, and adjusted earnings per share of $0.25 to $0.35. Wall Street's consensus called for fiscal-first-quarter 2016 revenue of only $197.7 million, and a loss of $0.02 per share. For the full fiscal year 2016, Take-Two sees adjusted revenue of $1.3 billion to $1.4 billion, with adjusted net income per share of $0.75 to $1.00. Analysts' models were more optimistic, calling for full-year revenue and earnings of $1.52 billion and $1.29 per share, respectively.
Why it's happening: Take-Two CEO Strauss Zelnick noted fiscal 2015 was capped by the seamless launch of five triple-A titles for the holiday season, including Grand Theft Auto V and NBA 2K15. Take-Two also enjoyed its highest-ever digital revenue, including company-record revenue from recurring consumer spending. Take-Two's new Evolve franchise was also a significant contributor to both digital and recurring revenue during the quarter.
"Fiscal 2016 is off to a great start," Zelnick elaborated," highlighted by the April launch of Grand Theft Auto V for the PC, which has exceeded our expectations."
As it stands, given Take-Two's strong quarterly earnings and solid start to the current fiscal year, I can't blame the market for overlooking the game maker's soft full-year outlook for now.
Steve Symington owns shares of Apple. The Motley Fool recommends Apple and Take-Two Interactive. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.