Take-Two Interactive Software, Inc. (TTWO) saw its loss narrow to $29.84 million, or $0.33 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $42.41 million, or $0.51 a share.
Revenue during the quarter grew 15.03 percent to $476.47 million from $414.22 million in the previous year period. Gross margin for the quarter contracted 303 basis points over the previous year period to 34.71 percent. Operating margin for the quarter stood at negative 5.96 percent as compared to a negative 14.29 percent for the previous year period.
Operating loss for the quarter was $28.41 million, compared with an operating loss of $59.20 million in the previous year period.
"Take-Two had a highly-successful holiday quarter," said Strauss Zelnick, chairman and chief executive officer of Take-Two. "Consumer demand for our new releases and catalog titles was strong throughout the period, and players continued to engage significantly with our games after purchase. As a result, we delivered better-than-expected bookings, including our best-ever quarter for recurrent consumer spending, along with double-digit growth in both net revenue and net cash provided by operating activities."
For fiscal year 2017, Take-Two Interactive Software, Inc. projects revenue to be in the range of $1,750 million to $1,800 million. The company expects net income to be in the range of $108 million to $117 million. It forecasts diluted earnings per share to be in the range of $1.15 to $1.25.
For the fourth-quarter 2017, Take-Two Interactive Software, Inc. projects revenue to be in the range of $542 million to $592 million. The company expects net income to be in the range of $139 million to $148 million. It forecasts diluted earnings per share to be in the range of $1.23 to $1.31.
Operating cash flow improves significantly
Take-Two Interactive Software, Inc. has generated cash of $239.60 million from operating activities during the nine month period, up 26.89 percent or $50.78 million, when compared with the last year period.
Cash flow from investing activities was $48.19 million for the nine month period as against cash outgo of $224.90 million in the last year period.
The company has spent $35.24 million cash to carry out financing activities during the nine month period as against cash outgo of $39.55 million in the last year period.
Cash and cash equivalents stood at $1,039.43 million as on Dec. 31, 2016, up 24.45 percent or $204.19 million from $835.24 million on Dec. 31, 2015.
Working capital declines
Take-Two Interactive Software, Inc. has witnessed a decline in the working capital over the last year. It stood at $587.36 million as at Dec. 31, 2016, down 9.82 percent or $63.98 million from $651.33 million on Dec. 31, 2015. Current ratio was at 1.32 as on Dec. 31, 2016, down from 1.45 on Dec. 31, 2015.
Cash conversion cycle (CCC) was almost stable at 41 days for the quarter, when compared with the last year period. Days sales outstanding went down to 55 days for the quarter compared with 56 days for the same period last year.
Days inventory outstanding has decreased to 4 days for the quarter compared with 8 days for the previous year period. At the same time, days payable outstanding went down to 18 days for the quarter from 23 for the same period last year.
Debt comes down significantly
Take-Two Interactive Software, Inc. has recorded a decline in total debt over the last one year. It stood at $258.88 million as on Dec. 31, 2016, down 47.34 percent or $232.70 million from $491.58 million on Dec. 31, 2015. Take-Two Interactive Software, Inc. has recorded a decline in long-term debt over the last one year. It stood at $258.88 million as on Dec. 31, 2016, down 47.34 percent or $232.70 million from $491.58 million on Dec. 31, 2015. Total debt was 8.38 percent of total assets as on Dec. 31, 2016, compared with 19.02 percent on Dec. 31, 2015. Debt to equity ratio was at 0.32 as on Dec. 31, 2016, down from 0.93 as on Dec. 31, 2015.
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