Crypto Says Profitability in Sight

7 May 2009
CryptoLogic Ltd. said first-quarter revenue fell 47 percent over last year, but that it expects to turn profitable again late in the second quarter.

Revenue for the three months ending March 31 came in at $10.1 million, down from $19.3 million during the previous-year period. On a sequential basis, revenue fell 11 percent.

Casino revenue came in at $6.5 million, with poker and a segment called "other" in at $2 million and $1.6 million, respectively.

Overall, revenue was down on a mix of lower wagering activity at its licensees, foreign exchange losses and the broader economic downturn, company brass said on a conference call with analysts and investors Thursday.

CryptoLogic recorded a net loss of $1.2 million, but operating expenses fell 43 percent year over year. It has remained in loss-making territory since the second quarter of 2008; net margins hit their trough in the fourth quarter of 2008.

Although the company announced it will be launching nearly 100 games before yearend, its shares on Nasdaq shed 19 percent in late-afternoon trading Thursday.

Todd Eilers, an analyst with Roth Capital Partners, advised investors to take profits Wednesday after Crypto's share value swelled on news Barney Frank had introduced new regulatory legislation.

The company ended the quarter with cash of $38.7 million and no debt.

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