Take Two Interactive investors sent the company’s share price down 5.2% Monday during trading hours following President Trump’s threats to “stop the glorification of violence” — but the Trump slump didn’t last long: Following the release of better-than-expected earnings Monday afternoon, Take Two’s stock regained around 7%.
“Fiscal 2020 is off to a terrific start with first quarter operating results that beat our expectations,” said Strauss Zelnick, Chairman and CEO of Take-Two, in prepared remarks. “We delivered significant Net Bookings and cash flow growth driven by the performance of ‘Grand Theft Auto Online’ and ‘Grand Theft Auto V,’ ‘NBA 2K19,’ the ‘Borderlands’ franchise, and ‘Red Dead Redemption 2’ and ‘Red Dead Online.'”
In its fiscal first quarter 2020, which ended on June 30, Take Two generated revenues of $540.5 million, compared to $388 million during the same quarter a year ago. Net income for the quarter was $46.3 million, equaling diluted earnings per share of $0.41, compared to $71.7 million in fiscal Q1 of 2019.
Based on these results, the company raised its outlook for the fiscal year ending March 31, 2020. Take Two now expects GAAP net revenue to range from $2.83 to $2.93 billion, and GAAP net income is expected to range from $425 to $454 million.
Earlier on Monday, President Trump appeared to blame video games for this weekend’s mass shootings in Dayton, Ohio and El Paso, Texas. “We must stop the glorification of violence in our society,” Trump said in prepared remarks Monday morning. “This includes the gruesome and grisly video games that are now commonplace.”
Take Two executives didn’t address trump’s remarks during the company’s earnings call, but Zelnick repudiated them in an interview with Baron’s Monday. “Blaming entertainment is irresponsible,” he told the publication. “The fact is entertainment is consumed world-wide… but gun violence is uniquely American. So we need to address the real issues.”
Trump’s remarks not only depressed share prices for Take Two during trading hours, but also Activision Blizzard, which is reporting earnings this coming Thursday.