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Take-Two Cuts Profit Forecast

January 06, 2006|From Reuters

Video game publisher Take-Two Interactive Software Inc. on Thursday posted lower fourth-quarter earnings and said fiscal 2006 results would fall significantly below Wall Street targets, sending its shares down 8% in after-hours trading.

The company behind the "Grand Theft Auto" games also cut its first-quarter forecast, citing the move to new video game console technology, shortages of Microsoft Corp.'s new Xbox 360 gaming machine and the timing of its own game releases.

New York-based Take-Two also said Gary Lewis, its global chief operating officer, had resigned to return to Europe.

Take-Two said profit for its fiscal fourth quarter ended Oct. 31 fell to 27 cents a share on sales of $308 million. It did not give comparable figures for the year-earlier quarter, but had reported net income of 91 cents a share, according to Reuters Estimates.

The results fell short of analysts' average forecast for a profit of 28 cents a share, but beat the consensus revenue target of $290.6 million. Citing continued weak holiday video game sales in both North America and Europe, as well as the delay of versions of its "Top Spin 2" and "College Hoops 2K6" games, Take-Two forecast $230 million to $250 million in sales and a net loss for its fiscal first quarter ending Jan. 31.

"The holiday season did not live up to anyone's expectations," said Paul Eibeler, Take-Two's president and chief executive.

Shares fell to $16.99 in after-hours trading from their close of $18.47, up 66 cents.

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