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Buyer Community> Trade Intelligence> Technology> UPDATE 1-Take-Two will sell unit, cuts outlook
Source: Reuters

UPDATE 1-Take-Two will sell unit, cuts outlook

Published: 21 Dec 2009 17:13:21 PST

* Sells Jack of All Games for $43.3 mln

* Sees Q1 rev $90 mln-$140 mln, adj EPS loss 45-55 cents

* Sees FY 10 rev $710mln-$910mln, adj EPS loss 48-68 cents

* Shares dive 7 percent

SAN FRANCISCO, Dec 21 - Take-Two Interactive Software In will sell its Jack of All Games distribution business to Synnex Corp for about $43.3 million, and slashed its forecasts for fiscal 2010 and the first quarter as a result.

The company expects first quarter revenue of $90 million to $140 million and a non-GAAP loss of 45 to 55 cents a share. It had previously forecast revenue of $210 million to $260 million and a loss of 40 to 50 cents.

For fiscal 2010, Take-Two now expects revenue of $710 million to $910 million and a non-GAAP loss of 48 cents to 68 cents a share, versus an earlier forecast for sales of $1 billion to $1.2 billion and a loss of 40 cents to 60 cents a share.

"The sale of Jack of All Games is consistent with our stated intention to focus our resources on our core business strategy," Take-Two Chief Executive Officer Ben Feder said in a statement on Monday.

Take-Two expects the deal to be worth $43.3 million, including $36.5 million in cash and up to an additional $6.75 million based on the achievement of certain items. It expects the deal to close in the first calendar quarter of 2010.

Shares in Take-Two slid 7.2 percent in extended trade to $8.75 from a regular-session close of $9.43. Stock in rival Electronic Arts also slid 2.1 percent after Take-Two revised its revenue and earnings outlook.

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