Embracer falls after video games maker warns of possible net debt target miss

Investing.com -- Shares in Embracer (ST:EMBRACb) tumbled in European trading on Thursday after the video game maker said that it was not likely to reach a debt reduction target and reported third-quarter income that missed estimates.

The owner of the popular "Tomb Raider" gaming franchise noted that it was in the "final stretch" of a sweeping resturcturing program that aims to improve efficiency and cash generation.

But the group flagged that it was unlikely to hit its target of ratcheting down net debt to 8 billion Swedish crowns ($1 = SEK 10.49) by the end of March.

"Embracer still has a few larger structured divestment processes ongoing that could strengthen our balance sheet and further reduce cap[ital expenditures]," Chief Executive Lars Wingefors said in a statement. "Processes are in mature stages."

In the October to December quarter, the pace of net sales expansion slumped to 4%, down from 128% in the year-ago period. Organic growth fell by 4% due to a light release schedule in its PC and console gaming division that reflected an increased focus on its mobile offerings.

Adjusted operating profit ticked up by 7% to 2.15 billion Swedish crowns, below analyst forecasts of 2.21 billion crowns, according to company-compiled estimates cited by Reuters.