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VIDEOTicker Shock: Four Reasons to Not Take-Two
Wednesday's top stories and stocks with potential to move.
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Asian stocks rose overnight. The Hang Seng was up 5.26% and the Nikkei was up 1.37%. Meanwhile, European stocks were in the green earlier this morning as well. And here in the US, we're currently trading higher.
Here's what I’m focused on this hump day.
Take-Two Interactive Software (TTWO):
The game publisher was out with its second-quarter numbers.Excluding items, it lost $0.04 a share. That may not sound so hot, but it was markedly better than the $0.13-a-share loss the Street had been expecting. Meanwhile, revenue came in north of expectations, too.
It would be great if the story ended there, but it doesn’t.
Per Reuters:
“The company reaffirmed its forecast for the fiscal year ending October 31 for a profit, excluding items, of nil to $0.20 a share, but lowered its revenue forecast to a range of $1.05 billion to $1.15 billion. It had previously pegged revenue at between $1.1 billion and $1.25 billion.”
That's a bit of a downer. In addition, the revenue estimate I’m seeing is for $1.17 billion.
My thoughts:
1. That ratchet down on the revenue could be viewed as a negative by analysts.
2. In 2010, the company is expected to earn $0.94. If it does, that wouldn’t be too shabby, but I’m not convinced it will hit that number. Presently, it's expected to earn just $0.12 a share this year, which is doable.
3. Insiders - with the stock in the single-digits, I’d sure like to see some open-market purchases.
4. What's the big catalyst to get involved now?
My gut tells me to punt and see how this plays out (pun intended).
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