Glu shares sink on disappointing quarter

Shares of Glu Mobile Inc. continued to slide after the mobile game maker posted a $56.9 million quarterly loss.
The San Mateo, Calif.-based publisher reported third quarter revenue of $23.9 million, up 44% from the same period last year, thanks largely to increased sales in Latin America and some European markets. But a $46.6 million charge for impairment of goodwill – a write-down of two of its three reporting units that were “determined to be below the carrying value of their respective goodwill balances” – led to the loss.
Glu also reported royalty payments of $1.9 million during the quarter as well as $126,000 in restructuring charges and “transitional expenses” of $347,000. The company lost $753,000 during the same period last year.
“We are disappointed in our results this quarter,” CEO Greg Ballard said during the earnings call, “and in our fourth-quarter outlook. The deteriorating economic conditions in the U.S. and increasingly to the other parts of the world have negatively affected our game sales this quarter. We expect these conditions to continue and these assumptions reflected fourth-quarter outlook. Moreover, even on those worldwide regions that are doing well in unit sales, our revenues are being impacted by the sudden and dramatic fluctuations in currency exchanges.”
The dire results come one day after solid quarterly results from Gameloft, which – like most mobile game makers – is betting heavily on high-end devices such as Apple Inc.’s iPhone to buoy a struggling segment.
Shares of Glu – which is widely viewed as a top-five player in the space – lost 16 cents, or 20%, following the news, settling at 65 cents per share by mid-day.