Take-Two Reports Higher Sales

Take-Two Interactive Software Inc. on Wednesday reported higher sales in its fiscal second quarter but said revenue deferrals and other factors drove profit and its full-year outlook lower.

The publisher of "Grand Theft Auto" and other popular videogames said revenue rose 21% to $420.2 million in the quarter ended Sept. 30 as gamers spent more on virtual currency and other add-on content, particularly for the latest installment of its " NBA 2K" franchise. The basketball game had a record first-week sales for the series when it came out last month, the company said. To date, it has sold-in more than 4.5 million copies to retailers.

Net income, however, fell 33% to $36.4 million, or 39 cents a share. Take-Two blamed the drop on deferrals of revenue under U.S. accounting rules, higher royalties for developers at its studios and increased marketing expenses.

Take-Two cited the same factors for lowering its profit forecast for fiscal 2017 to between $1.80 and $2.09 a share from $1.98 to $2.29. The company left its full-year revenue outlook of $1.75 billion to $1.85 billion unchanged.

Under U.S. generally accepted accounting principles, companies defer some revenue from online-enabled games for as long as they expect to provide services for those games, a period typically lasting six to nine months. Take-Two said net revenue deferrals rose to $59.3 million from $18 million a year ago.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

November 02, 2016 17:15 ET (21:15 GMT)

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