EIDOS ISSUES PROFIT WARNING OVER DELAY
Copyright 2003 www.tombraiderchronicles.com

[ June 27th 2003 ]

Shares in video game publisher Eidos have fallen as much as 10 percent after the company said shipment delays in Europe for its new Tomb Raider game would hurt 2003 pre-tax profits. Eidos needed to ship "Lara Croft Tomb Raider: The Angel of Darkness" by June 30, the final day of its current financial year, in order to book the sales for the period. It made the deadline in the United States but missed it in Europe. "While some units may ship within the current financial year, up to one million units will ship in July, the first month of the next financial year," the company said in a statement. "This has led the Board to significantly reduce its expectations for profit before tax for the financial year ending 30th June 2003," the statement read. The company did not disclose its pre-tax projection for 2003.

By 0855 GMT, Eidos traded down five percent at 132 pence. Shares in Britain's largest games publisher have dropped 23 percent in the past month. Analysts and retailers said they grew increasingly concerned about Eidos as it became clear the publisher would not hit its shipment target for Europe over the past two weeks. The company is expected to ship between 1.5 million and 2.5 million units globally. The company on Friday did not say when it expected the game to ship, but the UK Web site of Amazon.com offered a July 4 shipment date.

The company has delayed the launch in November to February and then to this month. It launched Tomb Raider in the United States on June 20. Eidos said the European delay was due to last-minute checks by Sony Corp. . The game is due for release on Sony's PlayStation 2 and for the PC. The company said the delay is not expected to impact Tomb Raider sales, though the company will now be forced to book a percentage of sales in its 2004 financial year.

Analysts had been estimating Eidos would record sales of between 170 million pounds and 180 million pounds and earnings per share of eight pence. Eidos has budgeted to spend two million pounds in Britain and six million euros in Continental Europe to promote the upcoming release. The company should get a lift next month when the movie "Lara Croft Tomb Raider: The Cradle of Life", a Paramount production starring Angelina Jolie, makes its debut in the United States, analysts said.

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