Electronic Arts Posts Smaller Second-Quarter Loss
Electronic Arts Inc., the second- largest U.S. video-game publisher, reported a narrower second- quarter loss. The company forecast profit this quarter below analysts’ estimates after moving the release date of a title.
The net loss narrowed to $201 million, or 61 cents a share, from a loss of $391 million, or $1.21 a share, a year earlier, Redwood City, California-based Electronic Arts said today in a statement. Excluding some items, profit was 10 cents a share in the period ended Sept. 30, beating the average 11-cent loss estimated by 21 analysts in a Bloomberg survey.
Electronic Arts moved up the U.S. release of “2010 FIFA World Cup South Africa,” boosting results in the second quarter at the expense of the third, Chief Financial Officer Eric Brown said in an interview. This quarter, Electronic Arts projects profit minus some items will be 50 cents to 60 cents, below the 69-cent average estimate of 21 analysts.
Sales will be $1.39 billion to $1.5 billion, compared with estimates averaging $1.43 billion, the company said.
Electronic Arts lost 45 cents, or 2.8 percent, to $15.75 in extended trading. The shares rose 40 cents to $16.20 at 4 p.m. New York time in Nasdaq Stock Market trading and have declined 8.7 percent this year.
Second-quarter sales, excluding changes in deferred revenue, totaled $884 million, exceeding of the average estimate of $811.6 million.
The shares fell 6 percent on Oct. 12 after “Medal of Honor” received a composite review score of 75 on the website Metacritic.com. The first-person shooter title faces competition from Microsoft Corp.’s “Halo: Reach” and the Nov. 9 release of “Call of Duty: Black Ops” from Activision Blizzard Inc., the largest publisher.
“Medal of Honor” has sold 4 million copies and is exceeding the company’s expectations, Brown said.
Electronic Arts’ ability to meet or exceed its full-year outlook will come down to execution of holiday releases including “Dead Space 2,” “Crysis 2,” “Dragon Age 2,” and “Bulletstorm,” Jess Lubert, an analyst with Wells Fargo Securities, said in a note to investors before the release. He has a “market perform” rating on the stock.
The company earlier today said it agreed to use the Facebook Credits payment system exclusively on its games on Facebook Inc.’s site. The publisher has increased its focus on social games, buying publisher Playfish last year.
(Electronic Arts will host a conference call to discuss earnings at 5 p.m. New York time. Dial +1-877-418-3422 with access code 16794663.)
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