Here’s why Take-Two Interactive stock jumped about 4% in after-hours trading on Tuesday

Take-Two Interactive Software Inc. (NASDAQ: TTWO) was reported about 4% up in after-hours trading on Tuesday after the video game company published a better-than-expected earnings report for the fiscal fourth quarter.

Financial performance

Take-Two reported $218.8 million (£154.20 million) of net income in the fourth quarter that translates to $1.88 per share. In the same quarter last year, its net income was capped at a lower $122.7 million, or $1.07 per share.

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The U.S. company generated $839.4 million of revenue in Q4 versus the year-ago figure of $760.5 million. According to FactSet, experts had forecast $746 million of revenue for Take-Two and 97 cents of earnings per share.

Net bookings and digital sales

The publisher of prominent titles, including Grand Theft Auto and Red Dead Redemption, noted an 8% increase in total net bookings in the fourth quarter. Net revenue from digital sales printed at $753.3 million or 19% higher than last year, making up 90% of the total quarterly revenue.

For fiscal 2021 as a whole, Take-Two registered a 9% annualised growth in revenue and a 46% increase in net income. In the prior quarter (Q3), the Nasdaq-listed firm had posted $190 million of net income.

Guidance for Q1 and the full financial year

For fiscal Q1, Take-Two now forecasts its per-share earnings to fall in the range of $1 to $1.10. It expects up to $780 million of revenue in the current quarter. According to the New York-based company, it will earn up to $2.20 per share this year on up to $3.24 billion of annual revenue.

In comparison, analysts are calling for $593 million of revenue for Take-Two in the first quarter and 64 cents of per-share earnings. For the full year, FactSet consensus stands at $3.45 billion of revenue and $4.23 of EPS.

CEO Strauss Zelnick’s remarks

Commenting on the earnings report on Tuesday, CEO Strauss Zelnick said:

“In Fiscal 2022, we plan to deliver an exciting array of offerings, including four immersive core releases, of which two will be from new franchises. In addition, we expect Fiscal 2022 to be our second consecutive year of Net Bookings in excess of $3 billion. With the strongest pipeline in our Company’s history, including many new releases planned for Fiscal 2023 and Fiscal 2024, we will be making significant investments this year to enhance our enterprise in key areas such as creative talent, IT, and other infrastructure. As we continue to grow our business, we believe that we will achieve sequential growth in Fiscal 2023 and establish new record levels of operating results over the next few years.”