Midway Games Expects Wider Loss

The turnaround effort at Midway Games (MWY Quote) is beginning to look like it may never end.

The struggling video-game publisher warned Tuesday that its third-quarter loss would be much wider than expected. Additionally, the company said it will fall far short of its previous full-year top- and bottom-line forecasts.

The move marked the third time the company has widened its predicted loss for the full year.

In a statement, the company blamed the lowered full-year outlook on lower-than-expected reorders by retailers of some of its recent games and the company's decision to push the release of several titles from this year into next.

"While we are disappointed with sales of some of our products this year, we continue to be excited about the progress we are making on, and the prospects for, our 2006 and 2007 products," company CEO David Zucker said in a statement. "We intend to focus on building a business that can thrive during the console transition and provide a foundation for success early in the next cycle."

In the short term, though, the company predicted more of the same: big losses on disappointing sales.

In the third quarter, which ended in September, Midway now expects a loss of $29 million, or about 33 cents a share, on sales of about $30 million when it reports results next Monday. Previously, the company predicted a loss of $19 million, or 22 cents a share, on the same amount of sales. Analysts, meanwhile, were expecting the company to lose about 25 cents a share on $30.3 million in sales, according to Thomson First Call.

The company will see a wider-than-expected loss in the quarter thanks in part to accelerated amortization and the write-down of acceleration of capitalized development costs related to games it released in the third quarter and that it will release in the holiday period. The move suggests that Midway now thinks those titles aren't selling -- and won't sell -- as well as the company originally expected.