Take-Two Interactive Software surged on Tuesday, despite posting mixed results and giving a downbeat outlook as it lost ground to from free-to-play games like Fortnite.
The video game publisher reported an adjusted quarterly profit of 78 cents per share, 3 cents a share above estimates. Revenue of $488.41 million, while up 18.7% from a year ago. fell short of expectations of $512.1 million from analysts polled by . Take-Two (NASDAQ:TTWO) shares rose more than 5% by 2:35 p.m. ET (18:35 GMT).
Net bookings, a measure commonly used by videogame companies, rose 19% to $488.4 million, underpinned by a NBA 2K19, Grand Theft Auto and Red Dead Redemption.
For the fiscal first quarter, the company expects revenue of $485 to $535 million and net income of $0.65 to $0.75 per share and net bookings of $310 to $360 million, compared with the S&P Capital IQ consensus of net income of $0.59 per share on revenue of $421.23 million.
For the full-year, bookings were expected in the range of $2.5 billion to $2.6 billion.
The cautious outlook on revenue led some on Wall Street to rein in their optimism on the stock.
"We lower our 12-month target (on TTWO) by $6 to $105," said CFRA, an independent research provider. The firm also cut its earnings per share estimates for 2020 to $4.40 from $5.18 and 2021 to $5.24 from $5.89.
"With the stock up 22% since Feb. 27 and close to our target, we see the shares as fully valued," CFRA added.
Electronic Arts (NASDAQ:EA) rose 5.1% and Activision Blizzard (NASDAQ:ATVI) rose nearly 4%.
