How to Sign Out of Ea Account on Madden 20
SAN FRANCISCO (MarketWatch) -- Electronic Arts Inc. said its second fiscal quarter profit fell 47% from a year ago, yet the world's largest independent video game publisher topped analysts' expectations as it accelerated the release of its popular FIFA soccer title in Europe on the last day of the quarter.
As a result of the shift, EA offered a forecast for its current third-fiscal quarter that was lower than expected, yet the company kept its full fiscal year profit outlook in a range with prior forecasts.
"It was pretty much how we expected, with most of their titles selling well plus the launch of FIFA in Europe, which drove a fantastic quarter," said Evan Wilson of Pacific Crest Securities.
Redwood City, Calif.-based Electronic Arts ERTS said profits for the quarter came in at $51 million, or 16 cents a share, compared to profits of $97.3 million, or 31 cents a share, for last year.
Revenue for the period was $675 million compared to $715.7 million last year.
Analysts expected EA to post earnings of 5 cents a share on revenue of $635.3 million, according to the Thomson First Call consensus.
EA's upside came largely from the European "FIFA 06" shift, a move that some analysts say could have generated $100 million in revenue for the quarter.
The company said FIFA's European sell-through is pacing more than 30% ahead of last year, and the game was at the top the charts in Europe for three consecutive weeks.
"We wanted to get to the marketplace first ahead of Pro Revolution Soccer and that strategy has worked extremely well for us," said chief financial officer Warren Jensen, in a conference call. Konami's Pro Evolution, released in late October, has received near-perfect reviews from the popular video game community Web site Gamespot.com.
Not all analysts adjusted their earnings and revenue estimates to account for the FIFA shift, however. Among those who did, Janco Securities analyst Mike Hickey called for 14 cents a share while Bear Stearns analyst R. Glen Reid called for revenue of $703.7 million.
EA had six titles in the quarter sell more than 1 million copies, including "Madden NFL 06," "NCAA Football 06," "Burnout Revenge," "FIFA 06," "NBA Live 06" and "The Sims 2 Nightlife."
The company dominated September retail sales, claiming six of the top 10 best-selling games and 10 of the top 20 best-sellers, according to NPD Group.
"Madden NFL 06" made a strong showing in the football category, as the PS2 version topped NPD's best-seller list for the second month in a row. Madden sales, however, were unable to offset declines in other titles as EA sales were down 6% on the month.
EA said its console game sales were off 5% for the quarter, though mobility revenue, which includes sales for games on the PlayStation Portable (PSP) from Sony Corp. SNE, the Nintendo's DS and Gameboy Advance, as well as cell phones, was up a staggering 520% to $62 million. Earlier this year, EA expanded its mobile segment, bring over a number of games from its Pogo.com online community. See full story.
For the PSP, EA says it was tops in North America with a 27% market share, a goal its set out to accomplish years ago. See full story.
EA's Asia revenue was up over 24%, though its European revenue was down 9% in spite of FIFA.
For the coming holiday quarter, EA said earnings would come in between $1.18 a share and $1.28 a share on revenue of $1.48 billion to $1.58 billion. Analysts expected the company to report earnings of $1.42 a share on revenue of $1.63 billion for the current quarter.
For the full fiscal year, EA said its profits would be $1.45 a share to $1.60 a share. The company trimmed the low end of its revenue range to $3.25 billion from $3.3 billion, with the high end coming in at $3.4 billion.
For the full year, analysts expected EA to earn $1.55 a share on revenue of $3.36 billion.
The current quarter marks the first period in which publishers will book sales of games for the next-generation Xbox 360 console from Microsoft Corp. See full story.
Electronic Arts did not shift the release of any key titles out of the current holiday quarter and appears to be having less trouble than some other publishers fulfilling its launch slate for the Xbox 360. Games available for the Nov. 22 launch include "NBA Live 2006," "Madden 2006," "FIFA: Road to FIFA World Cup, "Tiger Woods" and "Need for Speed Most Wanted." Other games for current generation consoles include "Harry Potter and the Goblet of Fire," and "James Bond From Russia With Love."
On its conference call, however, Electronic Arts CEO Warren Jensen said that the industry's continuing transition to new consoles could potentially lead to further "production or development snags or abrupt changes in pricing and demand."
In investing ahead of the next-generation, EA said its research and development headcount in the second quarter was up 39% to roughly 4,700 people, and related R&D expenses were up $25 million from a year ago.
In the past week, both THQ Inc. THQI and Take-Two Interactive Software Inc. TTWO,
Electronic Arts delayed the release of one of its Xbox 360 titles, "The Godfather," earlier this year. See full story.
In the fourth fiscal quarter, EA will roll out "Fight Night round 3", Battlefield 2: Modern Combat" and "Burnout Revenge" for Xbox 360. For current-generation consoles, EA was particularly optimistic about "The Godfather," as well as another new title "Black," an urban-themed shooter. See full story.
EA shares were flat at $55.79 in after hours trades after bidding them up nearly 1% to $56.40.
How to Sign Out of Ea Account on Madden 20
Source: https://www.marketwatch.com/story/electronic-arts-profits-fall-results-top-estimates
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