Publisher Midway Games has seen over 50% knocked off its share price in the past 24 hours, following a warning that it will report far lower than expected revenues in its second quarter financials, and consequently, far higher losses than expected.
Shares in the company fell below $4 on the New York stock exchange, an all-time low for the company’s stock. Midway’s warning indicated that the company would report second quarter turnover of just under $30 million in contrast to the originally anticipated figure of $40 to $50 million.
Profits are negatively affected by the revised figures, with the company now expecting an operating loss of between $11.5 and $12.5 million. The original projection for this loss was between $5 and $10 million.
Midway blames the decline in its figures on the delayed release of a number of games, as well as the poor sales of new products. Three titles in particular including two European releases will ship in the third quarter, missing their second quarter release dates, while slippage of other games has meant that they were released too late in the second quarter to benefit from reorders.
Slippage continues to be a problem for the company, with the report indicating that one of the Mortal Kombat titles will be released in the fourth quarter rather than in Q3 as originally expected. A title for the GameCube has also been cancelled outright.
We attribute these delays to poor management oversight, according to Michael Pachtner, an analyst for Wedbrush Morgan Securities, and believe that Midway must drastically improve its overall process management in order to meet scheduled launch dates for the balance of the year.