Take-Two Interactive Software, Inc. has announced financial results for its first quarter ended January 31, 2007.

Nett revenue for the first quarter was US$277.3 million compared to $265.0 million for the first quarter of fiscal 2006. Nett loss for the quarter was $21.5 million compared to a net loss of $29.1 million in the prior year's first quarter.

The first quarter 2007 loss includes $6.4 million for legal and other professional fees associated with the investigation of stock option grants and the company's responses to the New York County District Attorney's subpoenas, $6.1 million to record valuation allowances for deferred tax assets as required under Statement of Financial Accounting Standards, and $2.2 million in stock-based compensation.

While Take-Two's first quarter results continued to be negatively impacted by the video game industry's ongoing transition to next-generation platforms, the company realised higher gross profit margins in both its publishing and distribution businesses compared to the first quarter last year.

Publishing margins rose due to increased sales of the company's sports products, primarily NBA 2K7, along with the contribution of higher margin titles such as Grand Theft Auto: Liberty City Stories for the PlayStation 2 and Grand Theft Auto: San Andreas for the PlayStation 2 in Japan.

Distribution gross margins rose due to a more favourable mix of software titles sold, particularly an increase in those for next-generation platforms compared to the prior period. Take-Two's operating expenses declined by $10.0 million, or approximately 10%, from last year's first quarter as a result of reduced sales and marketing expenses, the closure of three development studios in 2006, and lower stock-based compensation.

Take-Two generated approximately $12.1 million in cashflow from operations in the quarter, bringing the company's cash position to $138.2 million as of January 31, 2007.

Rockstar Games' Grand Theft Auto: Vice City Stories for the PSP, Grand Theft Auto: San Andreas and Bully for PlayStation 2, and Grand Theft Auto: Liberty City Stories for the PSP and PlayStation 2 were among the largest contributors to revenue during the quarter. 2K's leading titles in the quarter were NBA 2K7 for the Xbox 360 and PlayStation 3 and PS2, The Elder Scrolls IV: Oblivion for Xbox 360, and College Hoops 2K7 for Xbox 360.