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Bad 3rd quarter for gigamedia

Gigamedia, parent to major online companies like Everest Gaming, has announced its Q3 2009 results, reporting on the second and third quarters, with Q2 revenues at $37.7 million and EBITDA of $2.3 million, but less encouraging third-quarter revenues of $37.2 million and negative EBITDA of $10 000. The management is forecasting a "small double-digit" fall in its Asian online games business revenue in the fourth quarter.
 
For the latest [third] quarter, Gigamedia posted a net loss of $2.4 million, compared with a profit of $12 million a year ago. Revenues declined by 19 percent year-on-year.
 
The company attributed the disappointing results to negative economic conditions and strong competitive pressures in Europe, and substantial marketing and other expenses surrounding new online game initiatives in Asia. Both the gaming software and the Asian online games businesses delivered worse than expected performance during the periods.
 
"We faced tough market conditions and strong operating challenges in the second and third quarters in our gambling software and our Asian online games businesses - and did not respond as well as we should," admitted Gigamedia Limited CEO Arthur Wang. "We were successful however in forging a powerful strategic alliance in Europe which we believe will be very value creative - and as a side benefit free up management time and financial firepower for our planned expansion in Asia."
 
The company highlighted the following events during the reporting period:
 
* Strategic alliance with Mangas Gaming by way of a sale of 60 percent interest in GigaMedia's online gaming software business to Mangas Gaming for an up-front cash payment of US$100 million . "The strategic alliance positions Everest Poker    to benefit from increased liquidity, cross-selling, and operational synergies," said a spokesman.
 
* World Series of Poker: Everest Poker celebrated the finals in its second year of sponsorship; extensive ESPN broadcasts of the tournament and finals are to air in Everest's European markets in Q4 and throughout 2010.
 
* New MMORPG launches: Warhammer Online in Taiwan and Hong Kong and Luna Online in China.
 
* Q2 and Q3 revenues of $37.7 million and $37.2 million, respectively; second-quarter net income of $128 000 and third-quarter net loss of     $2.4 million.



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