Take-Two Interactive misses Street, lowers forecast
Video game publisher Take-Two Interactive
Shares fell 5 percent in after-hours trading.
Duke Nukem, an action first-person shooter game, had been in production for more than a decade when it was finally released in June 2011 to poor reviews.
Take-Two's big bet on the game appears to have hurt its sales as the video game industry takes more risks with publishers investing money and resources on fewer titles per year.
In the 1990s, a top console game could be made for a couple of million dollars, but in 2011 a marquee game might cost between $20 million and $40 million to produce.
Duke Nukem was nothing to report home about, said Sterne Agee analyst Arvind Bhatia.
He added that the game's performance not only hurt first-quarter sales but is the reason behind the company's lower-than-expected earnings forecast for the second quarter, since fewer copies will be sold in that period.
For the second-quarter, Take-Two expects revenue between $70 million to $85 million and an adjusted loss between 55 cents and 65 cents per share. This is far below the $195 million in revenue Wall Street was expecting during the quarter.
The company's fiscal first quarter net loss was $8.7 million, or 11 cents per share. Excluding stock-based compensation and other items, the company reported earnings per share of 2 cents, which missed analysts' estimates of 9 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell 10 percent to $334.4 million, which came in below Wall Street's average estimate of $351.2 million.
For the full year, it expects revenue between $1 billion and $1.1 billion and earnings of 10 cents to 35 cents per share, which is in line with Wall Street's estimates.
Shares fell 5 percent to $10.51 after closing at $11.07 on the Nasdaq.
(Reporting by Liana B. Baker, editing by Bernard Orr)
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