Take-Two Interactive Software Inc. posted increased sales and margins but also its sixth-straight quarterly loss, and the videogame publisher said its current restructuring would cut 15% of corporate jobs.
The results for its fiscal first quarter were better than the company expected, and Take-Two predicted second-quarter earnings above Wall Street's estimates. The company also reiterated its bottom-line view for the year and raised its sales target by $15 million to a range of $725 million to $925 million.
Chairman Strauss Zelnick said the performance for the latest quarter reflected in part "the potential of our franchises through downloadable content and digital offerings."
"We feel a little bit better" about the prospects for 2010 videogame spending after a dour 2009, Mr. Zelnick said in an interview. "But our overall view is consumers are still being cautious with their spending." His comments echoed the sentiment of the other major videogame makers that have reported their latest quarterly results.
Mr. Zelnick said the company's upbeat view for the current quarter stems in part from the recent success of Take-Two's "BioShock 2" game. Also helping are expected strong sales for "Borderlands" and a growing digital distribution business.
Still, "[you] don't want to break an arm patting yourself on the back when you report a loss," he said.
Take-Two, which publishes the popular "Grand Theft Auto" series, last month announced layoffs to cut costs as sales slump. On Wednesday, the company said it expects them to result in savings of $8 million this fiscal year and $15 million each annually thereafter.
For the quarter ended Jan. 31, Take-Two reported a loss of $33.9 million, or 43 cents a share, narrowing from a year-earlier loss of $50.4 million, or 66 cents a share. Excluding stock-based compensation and other items, the loss narrowed to 31 cents from 56 cents. Revenue rose 9.3% to $163.2 million.
The prior-year results were adjusted to exclude the company's distribution arm, which was sold last month.
In December, the company predicted a loss of 45 cents to 55 cents on revenue of $90 million to $140 million.
Gross margin rose to 38.5% from 31.2%.
For the current quarter, the company expects a profit from continuing operations of 20 cents to 30 cents a share on revenue of $250 million to $300 million, while analysts estimated seven cents a share and $267.4 million, respectively, according to a poll by Thomson Reuters.
"We are pleased with the progress," Sterne Agee & Leach analyst Arvind Bhatia said. "Overall, it was a good report."
Take-Two's shares, which were off 2.7% at $9.03 in 4 p.m. trading on the Nasdaq Stock Market, rose 5.8% in after-hours trading.
—Ben Charny contributed to this article.