Analyst: Your Take-Two Interactive Earnings Breakdown

The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.

Take-Two Interactive (NASDAQ:TTWO) Q3 beat led by strong new releases, digital, catalog, and cost control. Revenue was $405 million, compared with our estimate of $375 million, consensusof $365 million, and guidance of $325 – 375 million. Revenue upside came fromnew releases NBA 2K13 and XCOM: Enemy Unknown, Borderlands 2, digital (23% of revenue), and catalog sales (22%). EPS was $0.67, compared with our estimate of $0.60, consensus of $0.55, and guidance of $0.45 – 0.60. Key drivers of the EPS beat were better-than-expected top-line growth and cost control.

Revised FY:13 guidance did not pass through the Q3 upside. FY:13 guidance for revenue went to $1.15 – 1.20 billion from $1.10 – 1.20 billion and for EPS to $0.05 – 0.20 from $0.00 – 0.20. We believe management did not fully pass through Q3 upside, as conservative Q4 expectations reflect lower initial sell-in of BioShock

Infinite and higher opex levels. Management is likely setting low expectations for Q4 in order to deliver another beat.

Revising our FY:13 estimates to reflect Q3 and guidance. Maintaining our FY:13 revenue estimate of $1.21 billion, lowering our…