Ahead of publisher Majesco's fiscal fourth quarter earnings call, scheduled January 29, analyst Michael Pachter of Wedbush Morgan reports a positive turn for the publisher, led by DS culinary collection Cooking Mama
Pachter indicated Wedbush expected revenues of $13 million, and that the holiday sales of Cooking Mama
was a major contributor to the company's $19 million dollar first-quarter retail sales, as reported by NPD Group, up 11 percent from the prior year.
This, and what Pachter categorizes as the company’s recent improving operational efficiencies" leads Wedbush to believe that the company is well on its way to "significantly improved earnings," despite the fact that it may "continue to struggle with its low cash levels."
Pachter also acknowledges the challenges facing the company, with no new word on a new CEO along with the aforementioned tight cash levels, but maintains that Majesco may be turning its budget console and handheld business into profitability. He points both toward Cooking Mama
's holiday sales, as well as the upcoming releases of Cake Mania
for the DS and Bust-A-Move Bash!
and Cooking Mama
for the Wii as examples of games that could turn a modest success for a modest cost.
That Majesco has positioned itself as a casual niche provider for the DS and Wii gives it a "first mover advantage," says Pachter. The company formerly got into trouble
after several major titles, including Psychonauts
and Advent Rising
, failed to bring in expected revenues during 2005.
"Our outlook on the company is improving," he concludes, "as the company’s revenues appear to have stabilized. Majesco has eliminated almost all development of premium frontline titles, and its cost structure is much improved. The company is slowly stringing together a series of modest hits that we believe along with further cost improvement should return the company to profitability."