Lower your earnings expectations on The 3DO Co. (Nasdaq: THDO) for the fourth quarter.
Shortly before market close Monday, the game software publisher said it expects to report fiscal fourth quarter earnings ranging between $10 million and $11 million, or 22 to 25 cents per share. First Call's survey of four analysts predicted a profit of 38 cents per share for the quarter ended Mar. 31.
3DO sees fourth quarter revenue ranging between $45 million and $47 million, or roughly double from $23 million in the year ago period.
The company blamed the earnings disappointment on delays in shipping a PlayStation title for its Army Men series of games, as well as a general industry slowdown.
"While our revenue growth continues to outpace many of our peers in the industry, there have clearly been some shifts at the retail level across multiple platforms which has resulted in slower than anticipated growth across the industry during the quarter," said Trip Hawkins, chairman and CEO of 3DO.
For the last few months, observers have been predicting a soft 2000 for entertainment software companies as gamers outside Japan await the release of Playstation 2.
3DO is the fourth game software firm in the last month to announce or warn of earnings below expectations. The company joins Midway Games (NYSE: MWY), Interplay (Nasdaq: IPLY) and Acclaim Entertainment (Nasdaq: AKLM) in releasing disappointing financial news.
Fourth gross margins did grow for 3DO by more than 50 percent year-over-year. The company shipped 15 titles during the quarter, which means 3DO shipped 26 new titles in fiscal 2000. The company has previously said its goal was to ship more than 25 new titles in 2001.
3DO plans to ship more than 50 titles in fiscal 2001, Hawkins said.
Also Monday, 3DO said it secured a $50 million credit line from a Foothill Capital, unit of Wells Fargo & Co. (NYSE: WFC). 3DO's cash and credit now exceeds $65 million.
The borrowed money will be used for acquisition, PlayStation 2 research and development, and European expansion, the company said.
Foothill's credit line replaces a $20 million facility with Coast Business Credit.>