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Electronic Arts Falls as Forecasts Miss on Sales, Earnings

Electronic Arts Earnings
Sean Decker, general manager of Electronic Arts Inc., with a "Medal of Honor" game in Los Angeles. Photographer: Jonathan Alcorn/Bloomberg

May 7 (Bloomberg) -- Electronic Arts Inc., the second-largest U.S. video-game publisher, fell in after-hours trading after the company’s forecasts for the current quarter and fiscal year fell short of analysts’ estimates.

Electronic Arts dropped 9 percent to $13.77 at 4:24 p.m. New York time. The company forecast a first-quarter loss of 40 to 45 cents a share excluding certain items, according to a statement today. Analysts on average had estimated a loss of 33 cents, according to data compiled by Bloomberg.

The company forecast adjusted revenue of about $500 million, short of analysts’ average estimate of $586.6 million.

The Redwood City, California-based publisher of “FIFA” soccer and a “Star Wars” multiplayer online game will delay a title into the next fiscal year, causing the annual revenue miss, Kenneth Barker, interim chief financial officer, said in an interview today. He declined to identify the game.

The company’s forecast of $4.3 billion in adjusted revenue for the year compared with analysts’ average estimate of $4.51 billion.

Fourth-quarter net income rose to $400 million, or $1.20 a share, in the period ended March 31, from $151 million, or 45 cents, a year earlier, Electronic Arts said. Profit minus some items totaled 17 cents a share, beating the 16-cent average of 20 analysts’ estimates compiled by Bloomberg.

Sales excluding items such as changes in deferred revenue totaled $977 million, topping analysts’ average estimate of $958.4 million. Total sales increased 26 percent to $1.37 billion, from $1.09 billion a year earlier.

Electronic Arts has increasingly made its products, once sold only as packaged goods, available over the Internet as consumers spend more money on interactive entertainment online. The company signed up more than 1.3 million active users for its “Star Wars: The Old Republic” multiplayer game, released Dec. 20. The game competes with Activision Blizzard Inc.’s “World of Warcraft.”

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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