EA Shares Down on Lower-Than-Expected Forecast

Monday, February 08, 2010

By Kathryn Glass
FOXBusiness


Despite reporting better-than-expected fourth-quarter results, shares of Electronic Arts Inc. (ERTS) fell nearly 10% in after-hours trading, when the company gave guidance that was below analyst estimates.

The video game software company expects non-GAAP earnings for the current fiscal year ending in March in the range of 50 to 70 cents a share on revenue between $3.65 billion and $3.90 billion. The forecast fell below expectations; analysts polled by Thomson Reuters had expected earnings of 74 cents a share on revenue of $4.07 billion.

EA expects an adjusted loss ranging from 35 cents a share to 40 cents a share in the first fiscal quarter, on non-GAAP revenue between $460 million and $500 million.

In the fiscal third quarter, EA saw a loss of $82 million or 25 cents a share, compared to a year ago when the company saw a loss of $641 million or $2.00 a share.

Adjusted earnings per share fell to $109 million or 33 cents a share, compared to $179 million, or 56 cents a share last year during the quarter. Non-GAAP revenue fell 23% to $1.35 billion, compared to revenue of $1.74 billion a year ago, as a result of fewer video game titles during this holiday season, the company said.

Analysts had predicted adjusted earnings of 31 cents a share on revenue of $1.34 billion.

"EA is growing share in our packaged goods business and our digital businesses continue to grow rapidly," said Chief Executive Officer John Riccitiello in a statement. "Mass Effect 2 is the first blockbuster of 2010 and we are looking forward to the launch of Dante's Inferno and Battlefield Bad Company 2."

Shares of EA were down $1.44 or 8.23% in trading after hours. The stock rose 23 cents or 1.33% to close Monday’s regular session at $17.49 a share.

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source: http://www.foxbusiness.com