Analyst: Majesco May Benefit from Real Money Gaming Growth
The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.
Q3 revenue was well below expectations and down y-o-y due to declining Zumba sales, weak current-gen sales ahead of the next-gen launches, and softness in Europe. Revenue was $4.0 million (down 56 percent y-o-y), compared with our estimate of $15.0 million, and the consensus estimate of $8.8 million. NonGAAP EPS was $(0.08), vs. our estimate of $(0.03) and the consensus estimate of $(0.07). No revenue or EPS guidance was previously provided for the quarter.
Treading water until the release of Zumba in Q1:14 and the next-gen console launches. The company maintained FY:13 guidance for revenue significantly below FY:12 and a non-GAAP EPS loss. We are decreasing our FY:13 estimates for revenue to $47 million from $78 million and for EPS to $(0.18) from $(0.13) to reflect Q3 results, and the shift of Zumba Fitness World Party to Q1:14 from Q4:13, offset by cost control. We are increasing our FY:14 estimates for revenue to $95 million from $80 million and for EPS to $(0.03) from $(0.08) primarily to reflect the aforementioned game shift.
Cost-cutting initiatives and the strategic realignment to a variable expense model decreased opex for the quarter to $4.8 million compared to $7.1 million last year and $5.2 million in Q2:13. The company has taken a number of steps to help it preserve cash as it works through the console transition.