Ahead of the Bell: Take-Two stock, earnings climb

INDIANAPOLIS

Shares of Take-Two Interactive Software Inc. climbed in pre-market trading Friday, a day after the video game publisher posted better-than-expected quarterly results.

Take-Two also raised its guidance and now expects to turn an adjusted profit in fiscal 2010, which would mark the first time in nearly a decade it posts a yearly profit without the launch of a new "Grand Theft Auto" game.

The company's shares rose $1.15, or 13 percent, to $10 in pre-market trading Friday.

The New York company said Thursday it earned $5.9 million in its fiscal third quarter in contrast to a net loss of $56.5 million in the same period a year earlier.

Revenue more than tripled to $354.1 million, largely due to strong sales of "Red Dead Redemption."

Kaufman Bros. analyst Todd Mitchell said in a research note that fourth-quarter and fiscal 2010 results will be driven by further demand for "Red Dead."

"'Red Dead' is a bona-fide sleeper hit in the industry this year, but in our view, the game should have been good," Mitchell wrote. "It took five years to develop and cost a significant amount."

Sterne Agee analyst Arvind Bhatia said in a separate note that the stock offers strong upside potential for investors with a 12-to-18 month horizon. Bhatia said the firm expects the company to at least announce the release date for its next "Grand Theft Auto" game within the next year, which should be a positive stock catalyst.