Majesco: Comes Out with Earnings, Gets Set for the Next Game
Rajesh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Majesco Entertainment (NASDAQ: COOL), the video game provider, came out with its second quarter earnings with the top line, which fell, but not without beating analyst estimates, and the bottom line, which rose, whipping the challenging retail environment.
…the quarter past
Revenues for the period slipped 5 percent to $30.4 million compared to a year ago quarter. The fall in revenue is attributable to the timing of release of the company’s Zumba Fitness products. However, Zumba Fitness forms 86 percent of the sales compared to 75 percent in the last comparable period. Also, the company’s $6.5 million international sales, which calculates to 21 percent of the top line, witnessed quite a jump compared to last year’s $3.2 million.
The increased promotion and licensing royalties on the company’s product offerings squeezed gross margin to 40 percent compared to 42.5 percent in the same quarter last year. However, the company posts sweeter bottom line which witnessed a jump of 30 percent over the prior period quarter.
The overall retail market ‘for interactive entertainment’ appears dull in US and Europe, yet the game provider posts another profitable quarter, with Zumba Fitness posting solid sales figure. Over 7 million units of the same have been sold worldwide, keeping both the customers and company in shape.
The quarters ahead…
Given the backdrop of a soft retail environment, the company puts forward a modest outlook for the rest of the year, expecting the top line to be in the range of $130 to $140 million for the current fiscal compared to $125 million in the previous fiscal. The company expects the third quarter to be cooler than last year’s, but is extremely excited to launch NBA Baller Beats and Zumba Core in the year end fourth fiscal quarter. The company will continue to devote roughly $4 million to $5 million in its social and mobile business games.
What more is in the lineup…
The company has a long queue of offerings and is looking forward to the holiday season with greater emphasis on high quality titles. The video game maker is putting tremendous effort for its NBA Baller Beats and Zumba Fitness Core.
The company will introduce the NBA Baller Beats this September. NBA Baller Beats is the first of its kind full body motion based video game which makes you feel like a professional playing with the real basketball. The Seattle Times has already branded the NBA Ballar Beats as the motion game of the year, while Family-Friendly Gaming has honored it with the silver award for best sports game of the year.
The next in line is Zumba Fitness Core, the evolved version of the second best-selling fitness game franchise, Zumba Fitness. The Zumba Fitness Core, scheduled for October, is a total body at-home workout focusing on tightening and toning abs. In addition to the content requested by customers, it also features new dance styles and fitness aspects.
Apart from the two big launches, the company shall offer other fun content such as the Harley Pasternak's Hollywood Workout which offers direct access to Harley Pasternak, the trainer of some of the fittest Hollywood bodies. The next is Hello Kitty Picnic, which is again slated for the holiday season. And finally comes the 3 different Cooking Mama combo pack.
Turning to the online game business, the company is coming out big with its first social game Mini Putt Park which is now out in the open data on Facebook (NASDAQ: FB). Also, it plans to come out with at least three to four mobile titles of which two of these titles are for Apple’s (NASDAQ: AAPL) iPhones, iPads, and iPod Touches. They are expected to come later this summer.
Concluding thoughts – watch the Game
The holiday season’s ahead, and the company looks well poised with the above mentioned lineup. It has delivered decent results in the first half of the year, given the dim retail atmosphere. The next two big attractions are the NBA Baller Beats and Zumba Fitness Core as they offer huge potential for the video game company. The company is all set to offer an interesting and a healthier half year ahead. All we need to do is, wait and watch the Game!
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