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CryptoLogic first quarter results fail to impress

Internet casino and gaming software specialist CryptoLogic (AIM:CRP) fell 12% this morning after the company released first quarter results (3 months to March 31).

First quarter revenues fell to US$7.6 million from $9.9 million in the previous quarter, which CryptoLogic blamed on ‘subdued wagering activity’.  Branded games revenue did however rise slightly, to $1.3 million from  $1.2 million, while operating expenses fell 36% to $8.1 million (Q4 09: $12.6 million) and G&A expenses fell 12% to $2.2 million  (Q4 09: $2.5 million).  The company reported a loss of $3.2 million for the quarter.

During the first quarter, CryptoLogic increased the number of branded games substantially, to 92, up from 66 at the end of previous quarter. This was partly due to a multi-licensing deal with William Hill, Bet24 and Betsson.

Looking ahead to the rest of 2010, the Dublin headquartered group said it expected conditions to improve gradually, driven by better waging activity.

"While subdued wagering activity impacted our revenues in the first quarter, the outlook for 2010 as a whole remains encouraging. Operating costs have declined further while our revenue base is showing signs of improvement in the second quarter,” Brian Hadfield, CryptoLogic's President and CEO, said. “The start of the World Cup soccer tournament in June provides short term uncertainty, however with a strong backlog of new business we expect our results to improve gradually as the year unfolds. As would be expected, the company continues to assess its revenue streams, costs, and strategic direction as it moves towards profitability."

Disclosure: The author holds no positions in the company