Jamdat Announces Increased Profits, Shares Plunge

Mobile game publisher and developer Jamdat has announced positive second quarter 2005 results, revealing that revenues for the post-IPO mobile company were $19.3 million, a 27% increase over the $15.1 million reported in the first quarter of 2005, and a 128% increase over the $8.4 million reported in the second quarter of 2004. Profits for the quarter for the Tetris, Bejeweled, and Jamdat Bowling mobile publisher/developer were $2.6 million, compared to profits of approximately $0.4 million in the prior year period, good news for the company, whose stock has recently been skyrocketing, partly on rumors that major publishers such as Electronic Arts might be considering a purchase. However, the company's results were evidently not spectacular enough for investors, particularly Jamdat's guidance for the full year for revenue of approximately $80 million, and GAAP earnings per diluted share of approximately $0.42. The company has previously predicted it would earn $0.55 cents a share, and analysts were hoping for $0.77, and as a result, Jamdat shares were down a significant $6.19, or just over 20%, to $23.30 in after-hours trading. Nonetheless, its financial release, Jamdat listed some of the key announcements in the last financial quarter, including the acquisition of Tetris mobile license holders Blue Lava Wireless, which came with a 15 year, exclusive license to the wireless rights for Tetris. In addition, the company signed with id Software for exclusive wireless distribution rights to DOOM RPG, currently a pet project of John Carmack himself, for mobile phones, and acquired exclusive wireless distribution rights to SOCOM: U.S. Navy SEALs from Sony Computer Entertainment America. Despite some investor uncertainty over the company's outlook, Jamdat's Chief Executive Officer, Mitch Lasky, commented of the financial results: "We are very pleased with our strong second quarter results, and in particular, with the completion of our integration of Blue Lava and the Tetris property into our product slate."