On Feb. 22, Midway Games (NYSE:MWY) released fourth-quarter earnings for the period ended Dec. 31.

  • Revenue increased by a significant 38.8% to $96.87 million, because of a strong performance from the Nintendo Wii, Microsoft Xbox 360, and Nintendo DS game systems.
  • Gross margins improved significantly to 30.9%, primarily led by a rise in inflows and lower royalties and product-development costs.
  • Earnings per share improved but remained negative.
  • Midway Games receives just one star from our community research service, Motley Fool CAPS, compared with two stars for Take-Two Interactive (NASDAQ:TTWO) and three stars for Electronic Arts (NASDAQ:ERTS).

(Figures in thousands, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$96,864

$69,810

38.8%

Net Profit

($2,025)

($37,815)

N/A

EPS

($0.02)

($0.42)

N/A

Diluted Shares

90,952

89,062

2.1%



Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

30.9%

19.1%

11.8

Operating Margin

0.4%

(52.0%)

52.4

Net Margin

(2.1%)

(54.2%)

52.1

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Investments

$73,422

$98,376

(25.4%)

Accounts Rec.

$51,366

$30,835

66.6%

Inventory

$2,891

$5,811

(50.2%)



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$7,864

$12,431

(36.7%)

Long-Term Debt

$3,611

$6,944

(48.0%)



Learn the ways of the balance sheet.

Related Foolishness:

Electronic Arts is a Motley Fool Stock Advisor recommendation. Microsoft is a Motley Fool Inside Value pick. Check out either service free for 30 days.

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