Take Two cuts forecast, delays game release

'BioShock 2' launch pushed back to fiscal 2010

SAN FRANCISCO -- Take Two Interactive Software reduced its financial forecast for the fiscal third quarter, as it delayed the release of one of its new video game titles and confronted tougher-than-expected retail conditions.

Shares of Take Two slid 12%, or $1.10, to $7.88 in after-hours trade on Monday.

The company said sales in the three months ending July 31 will total $120 million-$130 million, versus the $145 million-$165 million guidance it provided in May. The company projected a loss of 65 cents-75 cents a share on an adjusted basis, instead of an adjusted loss of 55 cents-65 cents a share.

Take Two said it expects to lose 80 cents-95 cents a share, adjusted, for the fiscal year ending October 31, instead of the break-even to 20 cents a share profit it had previously forecast.

Take Two said the most significant factor behind the revision is the decision to push back the launch of "BioShock 2" from the fiscal fourth quarter to fiscal 2010. Take Two said it was delaying release to provide additional development time for the title.

Take Two also said retail business conditions have proven more challenging than expected, resulting in reduced sales of catalog products and lower than anticipated initial retail orders of new releases.

Take Two said sales in the fiscal fourth quarter, ending Oct.31, will range from $350 million-$400 million, with adjusted EPS of 30 cents-40 cents. The company had previously forecast sales of $420 million-$500 million in its fiscal fourth quarter, with adjusted EPS of $1.08-$1.28.

Take Two said it would host a conference call later on Monday to discuss the financial revisions.
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