Video game publisher, Take-Two, warned of a massive quarterly sales and earnings shortfall today because of delays in new game releases and said its chief executive had resigned, sending its shares plummeting.
Take-Two, under investigation by the SEC for more than two years over its accounting practices, said Mr Richard Roedel, who became chairman on March 16th, had been named chief executive on an interim basis.
It also warned of severance charges for the departure of chief executive Mr Jeff Lapin, whose contract was amended in late 2003 to allow him to leave the company at any time after March 30th and continue to receive salary, bonus and health benefits for 18 months.
Because of the delay of the release of the new game Red Dead Revolver, plus lower-than-expected sales of older titles and the severance charges, Take-Two forecast a net loss of 15 cents a share on sales of $170 million for the fiscal second quarter ending April 30.
The company said Red Dead Revolverwill debut in the third quarter instead of the second quarter. It also said it has postponed the release of The Warriorsgame from the third quarter the first quarter of fiscal 2005.
For the full year fiscal 2004, it said it now expects net sales of $1.17 billion and earnings per share of $2, down from a prior forecast of $1.22 billion and $2.45 per share.