Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Midway: Ads Advance, Revenues Retreat

Video game developer Midway Games (NYSE: MWY  ) has a reputation for losing money, and that's never fun. It didn't improve that reputation in its latest quarter, but it might eventually benefit from an interesting opportunity emerging in the gaming industry.

Last night, Midway reported fourth-quarter results for 2005. Revenue fell 9.6% from the profitable year-ago quarter; the company's loss totaled $27 million, or $0.42 per share, net of a $10.8 million restructuring charge. That makes four consecutive quarters without a profit; Midway's last profitable quarter, in Q4 2004, was the company's first since Q4 1999. The outlook for 2006 doesn't bode any better. Revenue is expected to grow an uneventful 3%, and Midway expects "a reduction in net loss to approximately $66 million."

There's one ray of sunshine, though: Midway also announced yesterday that it signed a contract with in-game advertising company Double Fusion. Video games, with their demographically desirable young audiences, could become a significant source of advertising revenue for companies like Midway. Google's ability to deliver targeted advertisements to specific audiences helped that company boom, so it's worth watching to see whether ads will similarly buoy game developers in the future.

Midway's stock is down almost 11% in afternoon trading; at $9.71, it's well below its 52-week high of $23.73. Given the company's meager 2006 outlook, investors would be wise to bypass these shares in favor of profitable publishers like Motley Fool Stock Advisor recommendations Electronic Arts (Nasdaq: ERTS  ) and Activision (Nasdaq: ATVI  ) .

Power up your portfolio with more great stock picks from Tom and David Gardner'sMotley Fool Stock Advisor. You can get in the game with a free 30-day trial subscription.

Fool contributor W.D. Crotty does not own any shares in the companies mentioned. Clickhereto see The Motley Fool's disclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 511912, ~/Articles/ArticleHandler.aspx, 10/23/2016 2:52:04 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
EA $82.87 Up +0.35 +0.42%
Electronic Arts CAPS Rating: ***
MWY.DL2 $0.00 Down +0.00 +0.00%
Midway Games, Inc. CAPS Rating: *