Take-Two Cuts 2007 Guidance on 'Grand Theft Auto' Delay
Video game publisher Take-Two Interactive Software said Thursday it is delaying the release the latest installment of its top-selling "Grand Theft Auto" game until next year.
Take-Two cut its 2007 earnings outlook as a result of the delay, sending shares down sharply in after-hours trading.
"Grand Theft Auto IV," originally scheduled for release in October, will now launch in the fiscal second quarter of 2008, which ends in April of next year.
The game was expected to launch ahead of the crucial holiday shopping season where video game publishers make much of their money. The company said it needs more time to develop the game.
"Obviously, we are very disappointed to reduce guidance after having previously reaffirmed it," said Chief Executive Ben Feder in a statement. "Other than a matter of timing, the movement of 'Grand Theft Auto IV' does not compromise Take-Two in any way."
The company had said in June it expects a net loss between 60 cents and 65 cents a share for the fiscal third quarter ending July 31, but added it still expects to break even for the year. The company also forecast revenue between $1.2 billion and $1.25 billion for the year.
This is no longer the case. For the current fiscal year ending in October, Take-Two now expects a net loss between $1.25 to $1.35 per share, excluding stock options expenses and reorganization charges. Including the costs, the company forecast a net loss between $2.10 and $2.20 per share.
The company expects sales between $950 million and $1 billion for the year.
Analysts polled by Thomson Financial are expecting a loss of 30 cents per share on sales of $1.23 billion for the year.
Shares sank $2.56, or 15%, to $14.35 in after-hours electronic trading. In the regular session, shares added 15 cents to $16.91. The stock has ranged from $10.41 to $24.80 over the past year.