EA suffers third quarter dip

The US publishing giant reported net revenue for the three months ending December 31st at $1.270 billion, down 11 per cent from $.1.428bn in the previous year. Net income stood at $259m, compared with last year’s figure of $375m.

Meanwhile, net revenue was down 11 per cent in the US to $618m and down 13 per cent in Europe, to $577m.

The firm highlighted Need for Speed Most Wanted. FIFA 06, Harry Potter and the Goblet of Fire, The Sims 2 and Madden NFL 06 as its biggest successes of the quarter, each title shifting over two million units.

"We ended 2005 in a very strong competitive position," commented EA chairman and CEO Larry Probst. "We were number one on PlayStation 2, Xbox, PSP and PC in both North America and Europe.

“We also had a successful launch on the Xbox 360 and expect that we will be the number one publisher on this platform in 2006."

"Calendar 2006 will be a year of investment ahead of revenues," added CFO Warren Jenson. "Our resources will be focused on next-generation software and the global expansion of our online and mobile businesses."

The Redwood Shores publisher provided Q4 guidance below consensus expectations, with expected revenue set at between $550m and $600m.

Despite the results, analysts remained upbeat: “EA reported Q3 results that were slightly below consensus estimates - we think that Electronic Arts' guidance reflects appropriate caution about a difficult retail environment and an uncertain transition to the next generation consoles,” said Wedbush Morgan senior analyst Michael Pachter.

“Accordingly, we are lowering our FY07 revenue estimate from $3.15 billion to $3.02 billion, but reiterating our Buy rating.”


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