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Earnings Results: Take-Two stock drops more than 16% after bookings outlook slashed on weak mobile sales, pipeline shifts

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Take-Two Interactive Software Inc. shares dropped in extended session Monday after the videogame publisher cut its outlook for the year because of “shifts” in its pipeline and other headwinds.

Take-Two
TTWO,
-0.12%

shares fell more than 12% after hours, following a 0.1% decline to close the session at $108.40.

In a statement, Take-Two Chairman and Chief Executive Strauss Zelnick said the company is making “excellent” progress with its integration of Zynga, but cut its outlook for the quarter and year.

“We now expect to deliver net bookings of $5.4 to $5.5 billion in fiscal 2023,” Zelnick said. “Our reduced forecast reflects shifts in our pipeline, fluctuations in FX rates, and a more cautious view of the current macroeconomic backdrop, particularly in mobile.”

Analysts surveyed by FactSet had forecast $5.9 billion, based on a company estimate of $5.8 billion to $5.9 billion.

“Despite these headwinds and their effect on our guidance for the year, we remain highly confident in our diverse and extensive development pipeline that we expect will deliver us sequential years of growth and record performance,” Zelnick said.

Read: Videogame sales heading for decline in U.S., but one analyst sees a 2023 rebound

The company also expects third-quarter bookings of $1.43 billion to $1.48 billion, down from $1.5 billion to $1.55 billion, compared with the Street estimate of $1.55 billion.

Known for its “Grand Theft Auto” and “NBA 2K” titles, Take-Two reported a second-quarter loss of $257 million, or $1.54 a share, versus net income of $10.2 million, or 9 cents a share, in the year-ago period.

Revenue increased to $1.22 billion from $832.7 million in the year-ago quarter, while bookings came in at $1.39 billion compared with $858.2 million in the year-ago period.

Analysts expected Take-Two to report a second-quarter unadjusted loss of 95 cents a share, adjusted earnings of $1.37 a share, revenue of $1.41 billion and bookings of $1.55 billion. Take-Two does not provide adjusted earnings information, instead providing some financial information that can be used to calculate that number.

Back in September, Take-Two had a scare when a hacker had claimed to have source code and assets of “Grand Theft Auto VI,” and published them online.

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