Electronic Arts: Q1 Earnings
With nice weather and incentive to be outside and active, the summer quarter is a cyclic weak point for gaming companies. Wednesday, after the close of markets, Game publisher Electronic Arts (EA) (NASDAQ: ERTS), reported their fiscal first quarter earnings (for the period ended June 30th). The loss for the quarter, and other results were appropriate to the season, they also easily beat Wall Street analysts expectations, (though expectations were far from lofty.)
The Redwood City based company has been in the middle of a massive management reorganization and is also placing new emphasis on more mainstream focused Casual Gaming.
For the quarter, EA reported a loss of $132m (42cents a share), down heavily from a loss of $86m (26cents a share) for the same period last year. Adjusted to excluding one-time charges and account for changes in how the company records revenue for online games, the loss was far less: $69m (22 cents a share) versus $38m a year ago when using the same accounting.
Gross revenue for the quarter was off slightly to $395m versus $413m a year ago. Analyst consensus estimates were for revenue of $389.4m. EA only released a single new title during the quarter which contributed to the loss. CFO Warren Jenson noted, the company "Fully expected this to be a loss given [the] light quarter."
EA is focused toward the future and there is a general hope earnings will show the rewards of that over the coming year. Better results for EA are expected into the fall and winter quarters both when consumer spending is higher and when they’ve planned to introduce more titles in to the marketplace.
In late August, or early September, EA’s Sports Division will be taken over by recently hired gaming executive Peter Moore. The company also has as many as 10 games planned for release including several for the Wii console (which EA has been slow to serve) and even a game developed in conjunction with movie wizard, Steven Spielberg. EA will also hope to begin earning revenue from its recent in-game advertising partnership with Microsoft’s Massive game advertising subsidiary.
More detailed press coverage of EA’s finances can be found at:
