I'm just not a fan of Midway Games
Not really, but the data does include some positive developments. Revenues saw a nice 39% increase for the quarter, coming in at $96.9 million. Operating income was in the black, which should elicit a big cheer from shareholders. Sure, it was a tiny $400,000, but that still beat the year-ago quarter's $36.3 million operating loss. Year over year, the net loss improved from $0.42 to $0.02 per diluted share.
The top-line expansion is a good sign; as the installed user base of new systems from Sony
One of the drivers for the quarter was Midway's hit game based on the very successful Happy Feet film, which shipped more than 1.8 million copies. Licensing hit properties can work wonders for the bottom line -- just ask THQ
Is there any light at the end of the red-ink tunnel? Not this year. While the company anticipates a lively 36% increase in net sales for the next fiscal year, it also expects a diluted GAAP loss of roughly $0.44 per share; on an adjusted basis, that loss might be closer to $0.27. No matter how you look at the numbers, there's no black ink in sight. Even with the narrowing losses, Midway's fundamentals just aren't in the league of competitors like Activision
I may one day turn bullish on Midway -- if the publisher ever gives me a reason. For now, it's staying off my list of investment ideas. A review of the company's operational cash flow shows no positive numbers in the metric for the last few years. Couple that with continued bottom-line losses, and I'd say it's best to avoid this stock.
Spend some more Foolish time with video games:
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- The Game's On at EA
- Post your thoughts at the Fool's dedicated video game board.
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Fool contributor Steven Mallas owns shares of Activision and Disney. He thinks Defender is one hard game to master. As of this writing, he was ranked 13,991 out of 23,227 investors in Motley Fool CAPS. The Fool has a disclosure policy.