Take Two Interactive TTWO is set to report third-quarter fiscal 2022 results on Feb 7.
For third-quarter fiscal 2022, Take Two expects GAAP net revenues between $840 million and $890 million. The company projects earnings between 85 and 95 cents per share.
Net bookings are projected between $800 million and $850 million.
For the quarter, the Zacks Consensus Estimate for earnings has declined 1.7% to $1.31 per share in the past 30 days. The figure suggests a 9.60% decline from the year-ago quarter’s reported figure.
The consensus mark for revenues, pegged at $875.84 million, suggests 7.56% growth from the year-ago reported figure.
Notably, the company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average earnings surprise being 43.86%.
Let’s see how things have shaped up for this announcement.
Factors to Consider
Take Two’s fiscal third-quarter performance is expected to have benefited from the popularity of its franchises —Borderlands, Grand Theft Auto (GTA), Red Dead Redemption and NBA.
In the to-be-reported quarter, Take Two’s 2K announced the acquisition of Platygobian, operating as elite3d. Additionally, 2K acquired Turia Games, co-owned by the founders of elite3d.
In addition, Take Two’s Private Division acquired Roll7, a video game developing company.
The acquisitions of these game-developing companies are expected to expand the company’s global footprint and support its growing product portfolio. The same is likely to have benefited the top line.
Steady video game spending in the quarter is expected to have benefited Activision. Per VentureBeat, which cited NPD data, consumer spending on video games increased 16% year over year in October but dropped 10% and 1% year over year in November and December, respectively.
Major game releases in the third quarter are expected to have increased active user growth. This is anticipated to have been the largest contributor to net bookings in the to-be-reported quarter.
In December, Take Two’s Private Division and Roll 7 announced that OlliOlli World will be launched on Feb 8, 2022.
Take Two’s Rockstar Games announced that GTA Online: The Contract is now available worldwide for free download with a copy of Grand Theft Auto V.
In November, Take Two’s 2K and Gearbox Software released Tiny Tina’s Assault on Dragon Keep: A Wonderlands One-Shot Adventure.
The company also launched WWE SuperCard Season 8, a new Survivor game mode of its franchise WWE SuperCard.
Around the same time, Take Two’s Rockstar Games announced the worldwide availability of Grand Theft Auto: The Trilogy — The Definitive Edition.
These new releases in the to-be-reported quarter are expected to have had a positive impact on user engagement.
The company is also expected to have benefited from growth in recurrent consumer spending (virtual currency, add-on content and in-game purchases, including the allocated value of virtual currency and add-on content incorporated in special editions of certain games).
However, stiff competition from the likes of Activision Blizzard (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA) is expected to have hurt Take Two’s market share in the to-be-reported quarter.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Take Two has an Earnings ESP of +1.87% and carries a Zacks Rank #3 currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat in their upcoming releases:
Cedar Fun FUN has an Earnings ESP of 6.02% and a Zacks Rank #1. The company is all set to announce its fourth-quarter 2021 results on Feb 16. You can see the complete list of today’s Zacks #1 Rank stocks here.
FUN is up 32.8% in the past year against the Zacks Leisure and Recreation Services industry’s decline of 1.5% and the Consumer Discretionary sector’s fall of 18.6%.
Gildan Activewear (NYSE:GIL) GIL has an Earnings ESP of 9.57% and a Zacks Rank #2. The company is set to announce fourth-quarter 2021 results on Feb 23.
GIL is up 56.9% in the past year against the Zacks Textile – Apparel industry’s decline of 1% and the Consumer Discretionary sector’s fall of 18.6.
Fox FOXA has an Earnings ESP of 175% and a Zacks Rank #2. The company is all set to announce second-quarter fiscal 2022 results on Feb 9.
FOXA is up 26.9% in the past year against the Zacks Broadcast Radio and Television industry’s decline of 17.9% and the Consumer Discretionary sector’s fall of 18.6% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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TakeTwo Interactive Software, Inc. (TTWO): Free Stock Analysis Report
Gildan Activewear, Inc. (GIL): Free Stock Analysis Report
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