Electronic Arts misses 3Q sales forecasts
Electronic Arts (Nasdaq: ERTS) met consensus earnings estimates in the third quarter, but fell short of revenue expectations.
After market close Tuesday, the largest independent maker of game software reported fiscal third quarter net income of $91.5 million, or 66 cents per share, excluding special charges. That was in line with the earnings forecast produced by a survey of 13 analysts, according to earnings tracking firm First Call.
However, Electronic Arts' third quarter revenue of $640.3 million was 10 percent less than First Call's consensus estimate of $710.45 million.
Shares of Electronic Arts were unchanged in afterhours activity on the Island ECN, immediately following the release of third quarter results. Electronic Arts stock rose $1.31 to $40 in Tuesday's regular trading ahead of the earnings report.
Excluding EA.com, Electronic Arts earned $124.6 million on revenue of $629.9 million. That core revenue represented a 5.6 percent increase from $596.3 million in the year-ago period.
The company blamed the revenue disappointment on fewer-than-expected shipments of Sony's Playstation 2 consoles to North America and Europe. Game software vendors were counting on Playstation 2 to fuel a strong December quarter, but analysts in recent weeks have noted that the highly-anticipated machine was not appearing in U.S. stores as rapidly as originally projected.
Revenue in Japan, where PlayStation 2 has been available since March, increased 112 percent year-over-year. North American revenue rose 14 percent, and Asia Pacific outside of Japan gained 17 percent. European revenue, which was also hurt by the weak Euro, fell 10 percent from the comparable period a year earlier.
"In spite of the near-term shortage of PlayStation 2 hardware, which clearly impacted the quarter, I am very pleased with the progress we made against our key strategic objectives of being the market leader on next generation consoles, the PC and in online gaming", said Larry Probst, chairman and CEO.
EA.com lost $1.6 million, before special charges, as revenue increased 127 percent year-over-year to $11.2 million.
Including goodwill writedowns and non-cash costs, Electronic Arts posted overall net income of $88 million, or 63 cents per share in the third quarter.
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