Take Two (TTWO) to Report Third Quarter Earnings: What’s in the Cards?

Take two interactive TTWO is expected to release its third quarter fiscal 2022 results on February 7.

For the third quarter of fiscal 2022, Take Two forecasts GAAP net revenue between $840 million and $890 million. The company expects 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 fell 1.7% to $1.31 per share over the past 30 days. The figure suggests a decline of 9.60% from the figure reported a year ago.

The revenue consensus mark, set at $875.84 million, suggests growth of 7.56% from the figure reported a year ago.

Notably, the company’s earnings have exceeded the Zacks consensus estimate for the past four quarters, with the average earnings surprise being 43.86%.

Let’s see how things went for this announcement.

TakeTwo Interactive Software, Inc. EPS Prize and Surprise

TakeTwo Interactive Software, Inc. price-eps-surprise | TakeTwo Interactive Software, Inc. Quote

Factors to consider

Take Two’s fiscal performance in the third quarter should have benefited from the popularity of its franchises —Borderlands, Grand Theft Auto (GTA), Red Dead Redemption and NBA.

In the upcoming quarter, Take Two’s 2K announced the acquisition of Platygobian, trading as elite3d. Additionally, 2K acquired Turia Games, co-owned by the founders of elite3d.

Additionally, Take Two’s private division acquired Roll7, a video game development company.

Acquisitions of these game development companies are expected to expand the company’s global footprint and support its growing product portfolio. The same probably benefited the top line.

Steady spending on video games during the quarter should have benefited Activision. According to VentureBeat, which cited NPD data, consumer spending on video games rose 16% year-over-year in October, but fell 10% and 1% year-over-year. another in November and December, respectively.

Major game releases in the third quarter should have increased active user growth. This should have been the main contributor to net bookings in the quarter ahead.

In December, Take Two’s Private Division and Roll 7 announced that OlliOlli World will be launched on February 8, 2022.

Take Two’s Rockstar Games has announced that GTA Online: The Contractt is now available worldwide as a free download along with a copy of Grand Theft Auto V.

In November, Take Two’s 2K and Gearbox software were released Tiny Tina’s Assault on Dragon’s Keep: A Unique Adventure in Wonderland.

The company also launched WWE SuperCard Season 8a new Survivor game mode from 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 of the upcoming quarter should have had a positive impact on user engagement.

The company should also have benefited from growth in recurring consumer spending (virtual currency, add-on content and in-game purchases, including the allocated value of virtual currency and add-on content embedded in special editions of certain games).

However, fierce competition from Activision Blizzard and Electronic Arts is expected to have hurt Take Two’s market share in the quarter ahead.

What our model says

According to the Zacks model, the combination of a positive earnings ESP and a Zacks rank of #1 (strong buy), 2 (buy), or 3 (hold) increases the odds of beating earnings.

Take Two has an earnings ESP of +1.87% and currently carries a Zacks rank of #3. You can discover the best stocks to buy or sell before they are flagged with our earnings ESP filter.

Other actions to consider

Here are some other companies you might want to consider, as our model shows they also have the right combination of elements to show a pace of earnings in their next releases:

cedar fun FUN has a win ESP of 6.02% and a Zacks rank #1. The company is set to announce its fourth quarter 2021 results on February 16. You can see the full list of today’s Zacks #1 Rank stocks here.

FUN is up 32.8% over the past year, against the 1.5% decline in the Zacks Hobby & Recreational Services industry and the 18.6% drop in the Consumer Discretionary sector.

Gildan Sportswear GIL has an earnings ESP of 9.57% and a Zacks rank of No. 2. The company is expected to announce its fourth quarter 2021 results on February 23.

The GIL is up 56.9% over the past year against the 1% decline in the Zacks Textile – Apparel industry and the 18.6% drop in the Consumer Discretionary sector.

Fox FOXA has an earnings ESP of 175% and a No. 2 Zacks rank. The company is set to report its second-quarter fiscal 2022 results on Feb. 9.

FOXA is up 26.9% in the past year, against a 17.9% decline in the radio and television industry Zacks Broadcast and an 18.6% drop in the consumer discretionary sector over the past year.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

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