Glu offers cool forecast, hopes for increased interest in smartphones

Shares of Glu Mobile Inc. continued to slide after the company lowered its third-quarter forecast.
The San Mateo, Calif.-based mobile game publisher said it expects revenues “slightly below” its August forecast of $24 million to $24.7 million. The company also said it will likely see “a small non-GAAP operating loss” for the period; Glu had previously predicted non-GAAP net income between $500,000 and $800,000.
Widely considered to be a top-five player in the space, Glu’s stock has tumbled as mobile gaming fails to expand beyond early adopters and into the mass market. But like many of its competitors, the company is looking to the iPhone and other pricey gadgets to buoy the market.
“We continued to see headwinds in our North American sales driven by lower consumer spending and slower growth in new mobile handset sales,” said CEO Greg Ballard. “We believe the market for high-end handsets will grow significantly in 2009, and we are spending an increasing share of our development expenses on titles for high-end handsets.”
Morgan Keegan downgraded the stock from “outperform” to “market perform” on the news, and shares hit a 52-week low of $1.68 before rebounding to $1.83, 2 cents lower than Thursday’s close.