Thursday, Internet gaming software provider CryptoLogic Ltd. (CRYP,CRP.L,CXY.TO) reported a loss for the first quarter on sharp revenue declines, reflecting primairly challenging global economic conditions and unfavorable currency impact. Posting a fourth consecutive quarterly loss, the casino software developer said it is on track to returning to profitability and cash generation in 2009, in line with prior guidance.
Net loss was $1.3 million or $0.10 per share, compared to profit of $609,000 or $0.06 per share in the year ago period. In the preceding fourth quarter, net loss was $25.97 million or $2.05 per share.
Revenue fell to $10.13 million from $19.32 million in the same period last year. The company noted that revenue was affected by lower spending from the most avid players, coupled with the continued impact of the strong U.S. dollar.
Operating loss was $3.05 million, compared to profit of $458,000 in the previous year.
Commenting on the latest quarter results, Brian Hadfield, the president and chief executive officer of CryptoLogic stated, "In very challenging times, CryptoLogic continues to control what we can: containing costs, accelerating innovation and focusing on execution."
During the latest quarter, the company completed the integration of its poker network with that of GTECH Corp. CryptoLogic stated that the move enables significantly its cost base, and expects to realize the full benefit of the integration from the second quarter.
With the dour economic environment leading to reduced wagering activity in both the casino and poker markets, the casino software company is taking efforts to reign in costs.
CryptoLogic said it expects cost reduction initiatives and new customer additions to enable it to return to profitability and cash generation in the year, in line with the previous guidance, but remained cautious about top line growth. CryptoLogic's previous guidance calls for full-year net income of $9 million - $10 million, or earnings of $0.65 - $0.71 per share.
The company currently expects revenue to improve gradually as four of its licensees plan to launch 19 CryptoLogic-powered games in the second quarter, more than 50 games in the third quarter and about 30 games in the fourth quarter.
CRYP closed Wednesday's regular trading session at $7.87.
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