Atari Announce Weak Third Quarter News
Jon Wilcox
10/02/2005
Strong competition and hardware shortages cited for poor third quarter results for Atari…
The influx of third quarter results for the fiscal year 2005 continues as Atari becomes the latest company to announce their figures. The company have confirmed that net revenue for the third quarter ending December 31st 2004 stood at $161.8 million, down from $190.6 million on Q3 2004. Of that $143.3 million came from publishing revenues, down from $174.4 million the previous year, with distributing revenues up from $16.2 million to $18.5 million.
Atari have also announced its results for the nine month period ending December 31st 2004. Net revenue again tumbled from $402.5 million in the previous yearâs nine months period to $343.4. Publishing revenue dropped from $355.0 million to $301.1 million comparably, whilst distributing revenue fell from $47.5 million in the same period last year to $42.4 million.
Overall net income fell from $18.1 million in the nine month period last year to $14.8million in 2005. Atari anticipates the net revenue fourth quarter results to be in the region of $70 million to $80 million, with a net loss of between breakeven and $10 million. The company forecasts net revenue for the end of the fiscal year 2005 to be in the region of $413 million and $423 million, with net income standing between $4 million and $15 million.
Announcing the results, Atari President and Chief Executive Officer, Jim Caparro said, "Over the course of the last eight weeks, we've done an in-depth analysis of all aspects of our Company, realistically assessing our organizational complexity, identifying a multitude of untapped opportunities, and mapping out the strategy for realizing our primary objectives: to strengthen Atari's competitive position in the marketplace and enhance shareholder valueâ¦In a short time, we've begun taking aggressive steps to address structural, operational and financial issues which we anticipate will better position the Company."
Mr. Caparro commented, "Leading Atari's structural changes and driving its new strategic mandate will be a complete transformation of the senior management team and a realignment of responsibilities in order to bring greater focus and establish stricter procedures and practices throughout all of the Company's operations. The team has been strengthened and deepened by the recent addition of senior executives, including a new Chief Financial Officer with significant financial expertise and experience to provide the Company with improved fiscal discipline, and help address the financial and structural realities of, and evaluate alternatives for, Atari.
"Operationally, we've initiated a complete redirection of our product portfolio, giving our focus and resources to those intellectual properties that - based on market trends, consumer base growth, and emerging technologies - have the greatest potential to deliver a significant return on investment," continued Mr. Caparro. "As part of this redirection, we're assessing the continued value that certain non-core assets bring to the Company, and anticipate divestitures that will further focus our product mix and strengthen our balance sheetâ¦We are extremely optimistic about Atari's future, while also being realistic about the challenges that lay ahead. We've begun to evaluate and execute several strategic initiatives that mark the first steps towards simplifying Atari's global operations. Additionally, we believe there is enormous potential to unlock and create added value between Atari and its majority shareholder, Infogrames Entertainment, SA."
Weâll have more on Atari shortlyâ¦