Midway Games' Loss Narrows

Sales slow, but the video-game publisher issues upside guidance for full-year 2006.
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Video-game developer

Midway Games

(MWY)

said that its net loss narrowed in the third quarter despite lower revenue.

Midway, whose games include

Ant Bully

,

Mortal Kombat

and

NBA Ballers

, on Thursday reported a loss $22.2 million, or 24 cents a share, compared with a loss of $29.1 million, or 33 cents, a year ago. The recent quarter includes $1 million in stock-option expense.

The Chicago-based company, for the quarter ended Sept. 30, said that sales dropped 7% to $27.4 million vs. $29.5 million in the same quarter last year.

Thomson First Call analysts had forecast a loss of 26 cents on sales of $24.6 million.

For the fourth quarter, Midway expects revenue of roughly $86 million and income of $2 million.

Consensus is for $87.4 million in revenue and a profit of 5 cents a share.

For the full year, Midway forecast revenue of $155 million, but expects a wider income loss of $73 million compared with the $70 million previously forecast. Full-year consensus is for $153.3 million in sales.

Midway attributes this to decreasing margins on current-generation titles.

CEO David Zucker said that Midway was "pleased to exceed our financial expectations for the third quarter, and to continue our relationship with Warner Bros. with the third-quarter release of

The Ant Bully

and

The Grim Adventures of Billy & Mandy

, and our scheduled release of the

Happy Feet

game in conjunction with the movie release mid-November."

He said Midway expects "that 2007 will show the fruits of our investment over the last several years in next-generation technology and our sales and marketing infrastructure."

Shares of the company, which offers games to play on video-game console platforms, such as

Sony's

(SNE) - Get Report

PlayStation 2,

Microsoft's

(MSFT) - Get Report

Xbox, and Nintendo's GameCube, lost 3 cents to close the regular session at $8.22.

After hours, shares dropped 22 cents to $8.