Quantcast
Channel: The Cheat SheetDS – The Cheat Sheet

Majesco Entertainment Earnings Expected In-Line

0
0

Majesco (NASDAQ:COOL) will report Q4:11 (ending October) results after market close on Tuesday, January 17, with a conference call at 1:30pm PT (dial-in: 800-860- 2442, webcast: IR section of www.majescoentertainment.com)

We expect Q4 results in-line with our revised estimates for revenue of $33 million and EPS of $0.07, compared with implied guidance for revenue of $20 – 30 million and non-GAAP EPS of $0.00 – 0.03, and the consensus estimates for revenue of $26 million and EPS of $0.03.

We believe Zumba Fitness again drove sales and margin expansion. NPD data shows that Majesco’s Q4 U.S. retail sales tracked up ≈ 65%, due primarily to strong Zumba Fitness sales. We are raising our Q4:11 catalog estimates to reflect this. Zumba was the #1 fitness game in the US in 2011 based on NPD data, and it was a best seller in the UK as well. As of Q3:11, it sold over 3 million units worldwide.

Despite recent success, Majesco’s growth over the long-term depends on its ability to generate new franchises that can meaningfully impact the bottom line. A light release slate, apart from Zumba Fitness, and sales declines for the DS and Wii (Majesco’s primary platforms) may temper the company’s long-term growth potential. We do believe Majesco’s platform diversity is improving significantly as it now includes more games for Kinect and Move, which may help mitigate the impact from further DS and Wii sales declines. However, in our view, the Zumba sequel is unlikely to sell as many units as the original due to low attach rates among its target market and recent history that suggests exercise games may become fad items.

Maintaining our NEUTRAL rating, and our 12-month price target of $4, which reflects a forward multiple of 9x our FY:12 adjusted EPS estimate of $0.46. This multiple is below Majesco’s expected normalized growth rate to reflect uneven growth performance. Although we have a positive bias towards the stock, we remain cautious about the long-term sustainability of Zumba Fitness sales. Our price target reflects significant upside to current share prices, but we note that the stock has been trading within a large volatile range recently.

Michael Pachter is an analyst at Wedbush Morgan.

To contact the reporter on this story: Wall St. Cheat Sheet Staff at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

Read the original article from The Cheat Sheet

Nintendo Doubles Sales of This Popular Handheld Gaming Console

0
0

Nintendo’s 3DS handheld console sold 4.5 million units in the United States during its first year. Nintendo 3DS launched in the U.S. on March 7, 2011, and has since sold twice as many units as the original Nintendo DS did in its first year. A price cut and the release of popular new games helped boost sales.

Don’t Miss: Apple Has Something You Really Have To See: The Apple TV.

Nintendo confirmed that over 9 million 3DS software units have been sold, and overall sales from 3DS hardware, software, and accessories have now surpassed $1.2 billion in the United States.

Read more insightful stories at Wall St. Cheat Sheet:

Cumulus Media Inc. Fourth Quarter Earnings Sneak Peek.
The Future of the Wireless Industry Depends on Apple.
Sina Seeks Advertising Revenue Boost.

 

To contact the reporter on this story: Diallah Haidar at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

Read the original article from The Cheat Sheet

Analyst: Video Game Sales Are Tumbling

0
0

The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.

We expect May U.S. retail video game software sales data to be released by the NPD Group after the market close on Monday, June 17. We note that the data release has been delayed by a few days due to E3 the previous week.

We expect console/handheld software sales of $215 million, down 16% compared to last year’s $255 million. Despite an easy comparison of down 32%, we expect record-low monthly sales for May (the fourth decline in a row, and seventeenth in the last eighteen months) due to continued industry weakness, sluggish catalog sales, and a relatively light release slate. Our forecast calls for the lowest monthly software sales figure since April 2001, and we expect sustained positive growth to remain elusive until 2014.

Exhibit 1: Estimated Console/Handheld Software Sales (by Publisher)

By publisher ($ millions)                                                                           YoY                                     MoM

May-13E           % change                          % change

Activision Blizzard (NASDAQ:ATVI)                 $24                      -16%                                      -7%

Electronic Arts (NASDAQ:EA)                               $22                        -8%                                       -1%

Majesco (NASDAQ:COOL)                                             $2                      -57%                                       -4%

Nintendo (TYO:7974)                                                 $33                        16%                                       13%

Take Two Interactive (NASDAQ:TTWO)          $23                     -47%                                     -20%

Ubisoft Entertainment (EPA:UBI)                                $9                      -74%                                      -11%

Covered Publishers                                                        $113                      -31%                                         -4%

Overall Industry                                                              $215                      -16%                                       -15%

Publishers as % of Market                                               52%

Source: The NPD Group/Retail Track and Wedbush Securities estimates.

We expect May sales to be led by new releases Capcom’s Resident Evil: Revelations (360, PS3, Wii U) and Nintendo’s Donkey Kong Country Returns 3D (3DS), April release Warner Bros.’ Injustice: Gods Among Us, and Activision Blizzard’s Call of Duty: Black Ops II. We expect EA’s new release Fuse (360, PS3) to sell only 100,000 units, hurt by a release date late in the month and lackluster reviews. Nintendo’s Luigi’s Mansion: Dark Moon and Take-Two’s BioShock Infinite and NBA 2K13 are also expected to be among the month’s best sellers, with the latter helped by the NBA Playoffs.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

We expect hardware sales of 32,000 Wii U units (down 13% month-over-month), 34,000 Wii units (down 51% yearover-year), 124,000 Xbox 360 units (down 23% y-o-y), roughly 96,000 PS3 units (down 26% y-o-y), 41,000 DS units (down 59% y-o-y), 123,000 3DS units (up 7% y-o-y), and 15,000 PS Vita units (down 72% y-o-y). In April, combined current-generation home console (PS3, 360, Wii, Wii U) hardware unit sales were down 38% year-over-year, while handheld hardware unit sales were down 38% as well, resulting in overall hardware unit sales being down 39% for the month.

Until current-generation consoles see price cuts, demand is likely to continue to subside as anticipation for the nextgen consoles builds. Price cut announcements are expected at E3. We expect the prices for the PS3 and Xbox 360 to drop by at least $50 as we approach the holidays, with the Wii dropping to $99. Nintendo may look to spur Wii U sales through either a price drop of $50 or a bundle that includes some of its more popular software. Sony will likely cut price for its PS Vita handheld, which has struggled since release due in part to its high starting price point of $249.

We expect double-digit packaged goods declines to persist for much of 2013. While we expect positive growth to return in September (the launch month of Take-Two’s Grand Theft Auto V), we do not expect sustained growth until 2014, as new consoles from Sony and Microsoft are expected to launch late this year. In our view, the very poor performance of March releases suggests that only the hardest core gamers are interested in purchasing new games, and then only in the month of launch. Should this phenomenon persist, it may particularly impact Grand Theft Auto V reorders later this year.

Michael Pachter is an analyst at Wedbush Securities. 

Don’t Miss: 5 Ways Regulators Are Killing ‘Too Big To Fail’

Read the original article from The Cheat Sheet

Are Wii U and 3DS Sales Dragging Nintendo Down?

0
0
Source: Thinkstock

Source: Thinkstock

Another miss to end the year. Revenue was 73 billion yen versus our estimate of 91 billion yen and consensus of 106 billion yen. Hardware revenue was 29 billion yen versus our estimate of 68 billion yen. Nintendo sold under 100,000 units of the 2DS in its second-quarter of availability, and had its worst month ever for 3DS sales. Publishing revenue was 43 billion yen versus our estimate of 23 billion yen. Sales for the DS, 3DS, and Wii exceeded our expectations, while sales for the Wii U were below. EPS was (273) yen versus our estimate of (282) yen and consensus of (271) yen.

FY:15 guidance appears unrealistic given 3DS Q4 hardware weakness and Wii U struggles. Initial FY:15 guidance is for revenue of  590 billion yen, operating income of  40 billion yen, and EPS of 169 yen. In FY:14, Nintendo had revenue of  572 billion yen, an operating loss of (46) billion yen, and EPS of (184) yen. We are lowering FY:15 estimates for revenue to 515 billion yen from 578 billion yen, for operating loss to (20) billion yen from 0 yen, and for EPS to (100) yen from 0 yen. We think hardware guidance is unrealistic without price cuts that would create additional margin pressure.

We believe Nintendo has an unrivalled collection of owned intellectual property that could be used to bolster financial results now that management is more open to the concept of licensing. In its results release, the company announced that, “Nintendo strives to utilize its abundance of character IP more actively, providing its IP with more exposure in places other than video games, while achieving a certain level of profit from its licensing business at the same time.” It is unclear how, when, or where Nintendo will license its content, so we are unable to model the FY:15 impact. However, we see licensing as a long-term driver of growth that could offset current handheld and console weakness.

Lifetime sales statistics highlight how poorly the Wii U and 3DS have fared compared to their predecessors. The current worldwide hardware installed base for the Wii U is 6.17 million, compared to the Wii’s 101.06 million, and for the 3DS it is 43.33 million, well below DS’ 153.99 million. Lifetime software sales for the Wii U are 32.28 million, compared to the Wii’s 895.22 million, and for the 3DS are 162.92 million, compared to the DS’ 943.98 million.

We are maintaining our NEUTRAL rating and lowering our 12-month PT to 10,000 yen  from 12,000 yen. Our PT reflects an enterprise value of  500 billion yen, which reflects the value of Nintendo’s IP to a potential acquirer based on similar transactions.

Michael Pachter is an analyst at Wedbush Securities.

More From Wall St. Cheat Sheet:

Read the original article from The Cheat Sheet

Why We Need a French Electric Car From Outerspace

0
0
Source: Facebook/DS Automobiles

Source: Facebook/DS Automobiles

When I first saw the concept sketches for the DS E-Tense ahead of the 2016 Geneva Motor Show, the words “bio-mechanical French alien electric sex” immediately came to mind. Not to sound like a complete sci-fi nerd, but this electric concept is sexier than any Cylon out there. Hell, if this car actually goes into production someday it might end up being the most widely recognized otherworldly creation since the advent of the flying saucer.

Just a year after the official launch of the DS brand, the Citroen-based offshoot has released images of what the future of its electric strategy will likely look like, with 402 horsepower and zero emissions as its mating call. Slated for a Swiss debut, DS Automobiles says that this metallic green ametrine concept is just the beginning. “Our ambition was to create a high-performance electric GT. A car that embodies refinement, technology, and DS design. A car that inspires dreams. A car that gives you the overpowering urge to get behind the wheel.”

Source: Facebook/DS Automobiles

Source: Facebook/DS Automobiles

Featuring an outline that is reminiscent of what happens when a grand tourer coupé crossbreeds with an extra terrestrial sentient, the chrome-plated E-Tense has no windscreen on its back, utilizing a digital rear view screen instead. All of this high-def digital instrumentation comes to you via a 12-inch digital handset and a 10-inch touchscreen, which was created in collaboration with electronics specialist Coyote.

According to DS, it took over 800 hours to design, test, and produce the interior alone, as both the seat designs and the dashboard ate up a significant chunk of engineering time. The dash’s stretched mesh body has been made out of lightweight cold steel, and the steering wheel has a tulip-shape that is both design- and performance-oriented. Being that this is a high-end French prototype, no expense was spared along the way, and many of the vehicle’s internal accessories have been born out of collaborative projects with French luxury brands.

Source: Facebook/DS Automobiles

Source: Facebook/DS Automobiles

Inside there is this strange leather bag, which DS says is entirely hand-made in order to offer a nod to the “venerable tradition of French fine leather goods.” While we can only assume that it is carrying thermal detonators or alien transponders, DS assures us that its function is to either reinforce the driver’s seat so that “absolute safety is guaranteed,” or so that it can be removed in order to hold a race helmet. Timepiece technology has also been taken to a whole new level in the DS E-Tense as well, as the central console clock is removable and can be worn on the wrist at the owner’s discretion.

Since the car is completely silent on the outside, nine Focal Utopia speakers were slapped in so that the cabin could become an auditory arena. This is an interesting approach, as DS once again takes the path less traveled by choosing to partner with companies that rarely garner any attention from automakers, and we’re not just talking about the interior.

Source: Facebook/DS Automobiles

Source: Facebook/DS Automobiles

Utilizing parametric design to create things like that extremely aerodynamic grille, the E-Tense takes 3D printing to a whole new level as the automaker explains that it has created a concept car that “represents a road map for the future.”

Several more otherworldly additions include an illumination system that the automaker calls “DS LED VISION.” This active setup responds to driving conditions and inputs so that there is a welcome mode for drivers, a 20° wider illumination flux on both  sides of the vehicle for improved peripheral visibility, and a highway function that widens the beam of light in order to better penetrate rain, snow, and fog.

As previously mentioned, the two-seat prototype has just over 400 horsepower, which helps it hit 60 in around 4.5 seconds, and rear-wheel drive for added performance fun. The monocoque chassis is manufactured out of carbon fiber and comes equipped with independent double wishbone suspension at all four corners, and since the powertrain batteries are located beneath the floor, the E-Tense’s center of gravity is extremely low. This means that this car will likely handle quite well under vigorous driving conditions.

From the carbon fiber diffuser and flat undertray to the one-off Michelin tires and forged 20-inch alloy wheels, this car has it all when it comes to out of this world engineering and performance. But sadly this is a Citroen, so we won’t be getting it or anything resembling it from the automaker in the foreseeable future. That’s unfortunate, because we feel that everything about this concept would sell well in any quadrant of the universe.

Check out Autos Cheat Sheet on Facebook and Twitter

More from Autos Cheat Sheet:

Read the original article from The Cheat Sheet




Latest Images