This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Hope Fading at Atari

Bad times got worse at Atari (ATAR) as the company posted a loss and a 35% decline in sales in the important holiday quarter.

The struggling video game publisher also announced that CFO Diane Baker has resigned, effective immediately, to "pursue a new opportunity."

And if that wasn't enough, the company said that HSBC, a bank that has provided it with working capital, has cut off the company's credit line. Atari warned last month that its holiday quarter results didn't meet the strictures the bank put on the company last year.

"The uncertainties caused by these conditions raise substantial doubt about Atari's ability to continue as a going concern," the company said in a statement.

Investors reacted accordingly, dumping the stock in after-hours exchanges. In recent trading, shares of Atari were off 32 cents, or 36%, to 56 cents.

Certainly, the company's results in its fiscal third quarter didn't give investors any solace. Video-game providers typically see the bulk of their sales in the holiday quarter. And profit in the quarter usually make up for losses in other periods.

That won't happen for Atari this fiscal year. Instead of a profit, the company lost $4.8 million, or 4 cents a share, in the just-completed period. In contrast, the company earned $19.6 million, or 16 cents a share, in the year ago period.

Sales fell year over year to $100.8 million from $156.4 million a year earlier.

Excluding restructuring charges and costs related to discontinued operations, the company would have lost $3.4 million or 2 cents a share.

On average, the three analysts polled by Thomson First Call were expecting the company to earn 17 cents a share in the just-completed quarter on $146.8 million in sales. The company did not previously provide a forecast for the period.

Atari did not immediately provide its outlook for its fiscal fourth quarter.

Analysts had predicted the company would lose 3 cents a share in the current period on sales of $83.1 million. In the same period a year ago, the company lost $9.1 million, or 7 cents a share, on $62.7 million in sales.

Shares of Atari closed regular trading on Thursday unchanged at 88 cents a share.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs