The veteran online gambling software developer Cryptologic has issued a trading update ahead of the release of its third quarter results on November 5th, indicating that the traditionally slow nusiness period has not been kind to the company.
Uncertain macroeconomic conditions and sluggish wagering activity across the industry continued in the third quarter, contributing to a significant decline in wagering volumes at Cryptologic in both casino and poker compared with Q3/2008. A company spokesman said that while the third quarter is traditionally the slowest season for Internet gaming, the seasonal uptick in demand normally seen in September was well below historic trends.
There was a strong take-up of branded Cryptologic games by new licensees during the Q3/2009. The company expanded its total number of branded games on the market to 33, up from 13 in the second quarter and three in Q1/2009. As most of the new games scheduled for the quarter were not launched by customers until late in the period, revenue from these will only start to come through from Q4/2009.
As a result, the company expects to report Q3/2009 revenue of approximately $9.6 million and a trading loss of approximately $3.4 million.
However, the pipeline of new business continues to be strong and with a substantially expanded base of 28 new licensees, management remains confident of its strategy to return the business to profitability and long term growth, albeit at a slower rate than anticipated by management and the market.
The fourth quarter has started well and an up-to-date outlook for the period will be provided with the Q3/2009 results announcement, the spokesman added.
Source: InfoPowa News
Ed's note: The market did not take kindly to this news with Cryptologic closing at $6.42 (up $0.11 for the day) on the NASDAQ, but down over 17% to $5.30 in after hours trading.