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Midway Games Narrows Loss

Quarterly revenue climbs.

Video-game publisher

Midway Games


narrowed its loss in the latest quarter, but it still couldn't post a profit despite strong sales during the holiday season.

For the fourth quarter ended Dec. 31, Midway posted a loss of $2 million, much lower than the loss of $37.8 million during the same period last year.

The Chicago-based company lost 2 cents a share during the quarter, compared with a loss of 42 cents the year before, but that missed analysts' expectations for earnings of a penny a share.

Revenue for the quarter was $96.9 million, up 38.8% from $69.8 million during the same period in fiscal 2005. It beat analyst expectations of just under $86 million.

The loss during the most recent quarter included $800,000 of stock option expenses.

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Shares of Midway closed up 14 cents, or 1.7%, to $7.49. The stock has lost 11.5% in the three months since Nov. 22.

Midway said it shipped more than 1.8 million units of

Happy Feet

, the video game based on the Warner Bros. feature film of the same name, which released in the U.S. on Nov. 17. The

Happy Feet

game was seen as one of Midway's biggest-selling titles during the quarter.

For the first quarter of fiscal 2007, ending Mar. 31, Midway is expecting revenue of roughly $7 million, with a loss of about 25 cents a share. Excluding items, the loss should be around 23 cents.

As for the full year, Midway said revenue is likely to grow approximately 36% to $225 million, and the company is looking for a loss of 44 cents a share. Before items, the loss will be more like 27 cents a share, Midway predicted.

Only one analyst provided quarterly estimates and just two gave annual forecasts to Thomson Financial.