Midway Games Expects Wider Loss

Meanwhile, the company now expects to post a full-year loss of about $95 million, or $1.09 a share based on its current share count, on sales of just $145 million. The company's most recent outlook, given in August, was for a loss of $60 million, or about 69 cents a share, on $200 million in sales. Analysts had predicted a 72-cents-a-share loss for the year on $198 million in sales.

The company said it was delaying several unnamed titles into 2006. Additionally, the company has seen worse-than-expected demand for titles such as The Suffering: Ties That Bind and L.A. Rush.

But the warning is only the latest effort to bring down expectations. The company's original 2005 guidance, given early this year, was for a loss of about $38 million, or 43 cents a share, on sales of $225 million.

Although it once was one of the dominant game publishers thanks to hit franchises such as Mortal Kombat, Midway has struggled for years. The profit it posted in the fourth quarter last year made that the quarter the only one in which it has operated in the black in the past five years.

With the ongoing losses, the company has flirted with insolvency.

Despite that terrible track record, Midway has been able to linger on, thanks in no small part to Viacom (VIA.B) Chairman Sumner Redstone, who now owns nearly 90% of the company's outstanding shares. With Redstone's backing, the company raised $72 million in a convertible note offering in September. The move more than doubled the company's cash on hand.

Shares of Midway closed regular trading Tuesday up $1.20, or 6%, to $19.88.

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