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EA beats estimates amid game boom

The leading games publisher handily beats earnings estimates for its fiscal first quarter amid continued growth in the video game market.

Leading games publisher Electronic Arts handily beat earnings estimates for its fiscal first quarter amid continued growth in the video game market.

The Redwood City, Calif.-based company, which recently joined the benchmark Standard & Poor's 500 index, on Thursday reported a profit of $7.4 million, or 5 cents a share, for the quarter ended June 30, compared with a loss of $45 million, or 29 cents a share, in the same period a year ago. Sales totaled $331.9 million, compared with $182 million a year ago.

Excluding one-time charges, net income totaled $9 million, or 6 cents a share. On that basis, analysts polled by research firm First Call had predicted a loss of 8 cents a share.

Departing Chief Financial Officer Stan McKee said in a conference call with financial analysts that the company has prospered despite, or maybe because, of the weak overall economy. "In tough economic times, people tend to spend more on home entertainment, and that's right up our alley."

Investment service Zack's raised its recommendation for EA on Thursday, saying recent price cuts by video game hardware makers are boosting sales for software makers. "This greater demand by gamers of all ages has created a stir in the market," the company said in a report.

McKee said there are no signs that lower prices for video game machines will affect what consumers are willing to pay for software. "The market right now is holding at a $50 price point," he said. "We don't see the market going down in pricing."