Investopedia: Take-Two Still Offering Twists And Turns

Volatility can be both boon and bane to investors. Traders certainly love it, and savvy value investors learn to appreciate it for the discounts it can create. On the other hand, volatility based on inconstant underlying financial performance makes valuation more difficult and does no favors to the mental health of those who would prefer to be long-term shareholders.

For better or worse, Take-Two Interactive (Nasdaq:TTWO) continues to be a volatile company. While the company has certainly made progress towards more consistent financial performance, progress towards a goal is not the same as achieving that goal. Take-Two may still offer investors the potential for above-average capital gains, but prospective buyers have to ask themselves if they can handle the uncertainty that will go with the possible profits.

A Sweet and Sour End to the Fiscal Year
Take-Two recently decided to change its fiscal year, and the March quarter now represents the end of the company's fiscal year. For the quarter, Take-Two announced that revenue fell 22% to $182 million. Though that certainly does not sound all that impressive, that $182 million is considerably more than analysts expected, as the averaged estimate called for $148 million and the high-end estimate was $170 million. Sales were not driven by any major releases; rather, the company's revenue came from its catalog. To that end, this is an encouraging sign - if the legacy business can produce better revenue, that's a big step towards a more consistent financial performance. (For more, see Power Up Your Portfolio With Video Game Stocks.)

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