Profit Slips at Midway Games

Quarterly sales fall 31%.
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Midway Games

(MWY)

gave a mixed quarterly report on Monday, following the lead of its larger rivals in the video-game publishing businesses.

The company edged Wall Street's earnings expectations, but fell shy of revenue estimates as sales plunged 31%. And it forecast a wider-than-expected loss in its current quarter and for the full year.

In the first quarter, Midway lost $16 million, or 19 cents a share, compared with a loss of $15 million, or 27 cents a share, in the same period a year earlier. The company's share count swelled from 55.8 million to 85.6 million shares year over year, accounting for the narrowing in its per-share loss.

Meanwhile, the company's sales slumped to $13.8 million in the first quarter from $20.1 million a year ago.

Analysts were expecting Midway to lose 20 cents a share on $16.3 million in sales. The company

forecast in February that it would lose about $18 million on $14 million in revenue in the just-completed quarter.

For the second quarter, Midway predicts it will lose $25 million on about $40 million in sales. Although Midway did not give per share guidance, the company's forecast implies a 29-cents-a-share loss if its share count remains constant in the second quarter and a 24-cents-a-share loss if the share count grows as fast as it did in the first quarter.

The company is now expecting a full-year loss of roughly $47 million on sales of $225 million. That guidance implies a loss of about 42 cents a share if the share count continues to grow at the present rate to a loss of about 55 cents a share if the share count remains unchanged.

The Street had predicted that the company would lose 12 cents a share on sales of $48.3 million in the current quarter and would post a 41-cents-a-share loss for its full fiscal year on $222.9 million in sales. Midway's previous guidance was for a full-year loss of $38 million, or about 42 cents a share, on $225 million in sales.

Last week,

Electronic Arts

(ERTS)

,

Activision

(ATVI) - Get Report

and

THQ

(THQI)

all offered disappointing guidance for their current quarters.

Shares of Midway closed regular trading on Monday up 13 cents, or 1.4%, to $9.43. The company's report followed the bell.