Barry
Mr. Do It All
Nov 11, 2005, 5:30 PM
Post #1 of 1
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Midway Games Thrid Quarter 2005 Losses
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Midway Games acked up a nice total in net sales, but the rest won't exactly make the high-scorers list. For the third quarter, Midway took in $29.5 million, a 74% improvement over last year's net sales number. The company posted a loss in operating income of $28.2 million, more than twice the previous year's Q3 loss of $13.9 million. Net loss for shareholders in the quarter was $29.1 million, compared with $16.1 million during the same period in 2004.
Net sales revenues declined 4.9% to $80.3 million from the comparable period one year ago, while the operating loss just about doubled to $72.2 million. Finally, the net loss for shareholders during the past nine months was $75 million versus $42.3 million in the previous year's equivalent timeframe.
As seen in the earnings release, Midway's costs and expenses rose precipitously across many lines. As in the movie business, inflation of product-development budgets is wreaking havoc with the business model. The best antidote to such a conundrum is to possess a portfolio that's overweight with great brands. And Midway certainly has some cool brands, such as Mortal Kombat and its various arcade collections, but so does the competition. Sumner Redstone has also accumulated a majority of the company's shares (more than 88%). They believe in Midway so there's no question that this was a good trade for many people.
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