- Forecast overshadows gains from Star Wars in holiday quarter
- Movie-themed game sold 13 million units, topping forecast
Electronic Arts Inc., the second-largest U.S. video-game publisher, fell as much as 12 percent in extended trading after forecasting fiscal fourth-quarter results that fell short of Wall Street estimates.
The shares tumbled to $64.14 in late trading and dropped as low as $61.27 after the company released third-quarter earnings and its outlook for the final three months of the year ending in March.
Electronic Arts has exceeded its own earnings guidance for the past 10 quarters, Chief Financial Officer Blake Jorgensen said in an interview. One challenge the company is confronting is the strong dollar. Excluding those effects, the company’s live services unit posted a 22 percent gain in revenue from titles like FIFA, Madden NFL and Hockey Ultimate Team in the period just ended. The strong dollar trimmed that gain to 13 percent.
“We’re fairly conservative,” he said. “Analysts tend to forget things like FX headwinds. We’re looking for a strong quarter.”
Electronic Arts, based in Redwood City, California, posted third-quarter profit that beat analysts’ estimates as sales of the new title Star Wars Battlefront exceeded company projections.
Profit excluding some items rose to $596 million, or $1.83 a share, the company said Thursday in a statement. That beat the $1.81 average of analysts’ estimates compiled by Bloomberg. Adjusted revenue gained 26 percent to $1.8 billion in the period ended Dec. 31, compared with estimates of $1.81 billion.
Star Wars Battlefront, riding on the popularity of the movie, helped deliver the record holiday results, with sales exceeding 13 million copies. Sales of popular sports titles like FIFA, Madden NFL and Hockey Ultimate Team live services increased 13 percent, the company said.
The net loss for fiscal third quarter was $45 million, or 14 cents a share, compared with profit of $142 million, or 44 cents, a year earlier. Revenue, excluding adjustments fell 5 percent to $1.08 billion.