Jan. 28 (Bloomberg) -- Electronic Arts Inc., the No. 2 U.S. video-game maker, posted third-quarter sales that fell short of analysts’ estimates and cut its full-year revenue outlook as shoppers spend less on games for old consoles.
Sales, excluding some items, grew 33 percent to $1.57 billion in the quarter ended Dec. 31, the Redwood City, California-based company said today in a statement. That missed the $1.66 billion average of 24 estimates compiled by Bloomberg. Revenue this quarter will be about $800 million, the company said, shy of analysts’ estimates of $825.7 million.
Software sales are shrinking because of relatively fewer games available for the new PlayStation 4 and Xbox One consoles from Sony Corp. and Microsoft Corp. Consumers are also spending less on their older machines. Electronic Arts led the industry in titles for the new devices in the quarter, including revenue from “FIFA 14” and “Battlefield 4,” the company said.
“Current gen software sales had a steeper decline than we thought,” Blake Jorgensen, chief financial officer, said in an interview. “We’re very encouraged by the popularity of the new-generation hardware but were surprised the current generation dropped off as quickly as it did.”
For the current quarter, Electronic Arts forecast profit of 9 cents a share, in line with analysts’ projections. Full-year sales will be $3.91 billion, less than the $4 billion projected on Oct. 29.
Electronic Arts fell 2.5 percent to $24.25 in extended trading. The stock rose 1.6 percent to $24.87 at the close in New York and gained 58 percent last year. Chief Executive Officer Andrew Wilson, promoted to the post in September, is focused on delivering online revenue in addition to shipping new titles for consoles.
For the third quarter, the company posted a net loss of $308 million, or $1 a share, compared with a loss of $45 million, or 15 cents, a year earlier. Sales tumbled 12 percent to $808 million.
Excluding items, third-quarter profit soared to $1.26 a share from 57 cents a year earlier, beating the $1.23 average of estimates.
Online revenue increased 27 percent to $517 million, on titles including “FIFA Ultimate Team,” “Madden NFL Ultimate Team” and “NHL Hockey Ultimate Team.” Like other game makers, Electronic Arts has reduced the number of packaged titles, focusing more resources to the Web.
The company should benefit from the March release of “Titanfall,” a title that will be exclusive at first to Microsoft’s Xbox consoles and personal computers, said Michael Pachter, an analyst at Wedbush Securities in Los Angeles who recommends buying the stock.
With a strong release slate over the next two years, including games made under license from Walt Disney Co.’s “Star Wars” franchise, Electronic Arts could increase revenue by $400 million a year and add 50 cents a share to profit, he said.
(The company plans a conference call at 5 p.m. New York time. Go to http://ir.ea.com to listen.)
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