Analyst downgrades Atari's rating

After Atari announced its disappointing quarterly earnings yesterday, the publisher's stock promptly lost a third of its value in after-hours trading. While it has recovered the better part of that setback in trading today, the bad news is starting to pile up.

In its report, Atari revealed sharply declining revenues and a loss of $4.8 million where it made $19.6 million in profit the year before. It also acknowledged that executive vice president and CFO Diane Baker had left the company "to pursue a new opportunity."

As a result, industry research firms downgraded its rating of Atari stock today from "Buy" to "Hold." In a note to investors, Wedbush Morgan's Michael Pachter said, "We're jumping off the roller coaster," saying that the company's turnaround to sustained profitability will take longer than previously expected and that Baker's departure leaves the company with "a serious management void."

Atari has lost money in five of the last six quarters, and Pachter expects it to lose money in four of the next five. The company's stock was trading for 75 cents at press time, up 15 cents from its opening price this morning, but still down 13 cents from Thursday's close.