Midway Games Shares Slide on Outlook

Shares of Midway Games (MWY Quote - Cramer on MWY - Stock Picks) were down more than 6% on Tuesday after it warned of lower-than-expected fourth-quarter results.

The video-game maker said it would report a loss for the fourth quarter, compared with previous guidance for earnings between $15 million and $40 million. Meanwhile, it expects revenue to be between $78 million and $83 million, vs. prior estimates of between $105 million and $155 million.

Midway attributed its profit warning to weak demand for its video games during the holiday season. On the news, shares were down 28 cents at $4.01. The stock is down 49% in December.

Looking ahead, Midway is forecasting pretax earnings of $20 million to $30 million for 2003. However, the video-game maker said that it is looking into opportunities to "streamline" its operations that could result in nonrecurring charges that would reduce pretax earnings.

Midway is predicting revenue for 2003 of $250 million to $275 million. Wall Street analysts were expecting sales of $277.7 million, according to Thomson Financial/First Call.