Midway losses deepen as restructuring causes revenue drop

Publisher Midway has announced a loss of some $28.6 million for the fourth quarter of its 2003 fiscal year, which ended on December 31, representing a deepening loss for the company as revenues plummet due to restructuring efforts.

Revenues for the quarter were $30.1 million, a massive drop from the $80.2 million reported in the same quarter a year previously, while losses were up from the $25 million figure twelve months ago.

The drop in revenues was to be expected, as the company is currently restructuring its development operations and announced in the middle of last year that a large number of games had been moved to 2004 in order to improve the quality of the products.

However, the projections for 2004 provide a cause for concern - with Midway projecting a loss of $19 million on revenues of $12 million in the current quarter, and projecting a full-year loss of $20 million on revenue of $143 million, which is significantly worse than most analysts had expected.

Unsurprisingly, Midway shares dropped significantly after the results were announced. However, although the restructuring of the company has proved more painful than it expected, if successful it should see Midway enjoying profitable quarters by the end of this year. Should the company fail to turn a profit in Q4 2004, however, serious questions will undoubtedly be asked about the future viability of the business.