NEW YORK (AP) — Shares of Majesco Entertainment Co. fell Tuesday, a day after the video-game publisher reported fiscal third-quarter earnings that fell well short of Wall Street predictions and a steep drop in revenue.
THE SPARK: Late Monday, Majesco said that its net loss for the quarter, excluding one-time items, was $3.2 million, or 9 cents per share, compared with $1.1 million, or 3 cents per share, a year ago.
Revenue dropped to $9.1 million for the quarter that ended in July from $19.5 million a year ago.
For the latest quarter, analysts polled by FactSet were on average expecting a loss of 5 cents per share on revenue of $12.4 million.
THE BIG PICTURE: The company says the sharp year-over-year sales drop is because major gaming platforms like the Nintendo Wii and DS are getting older.
THE ANALYSIS: Sean McGowan at Needham & Co. was pessimistic about the future, saying the company might come out weaker from the transition to new devices, like the Wii U due out this holiday season.
McGowan cut his rating on the stock to "Hold" from "Buy."
Wedbush Morgan analyst Michael Pachter applied a similar analysis. He cut his price target on the shares to $3 from $4 and kept a "Neutral" rating.
SHARE ACTION: Majesco shares fell 7 cents, or 4 percent, to $1.67 in midday trading. Earlier, they hit a 52-week low of $1.62.