Electronic Arts Inc. (EA:US), the No. 2 U.S. video-game maker, said profit rose in the second quarter while predicting earnings in the current period that trailed estimates as some revenue on games for new consoles is deferred.
Profit, excluding some items, is projected to be about $1.22 a share, in the three months ending in December, the Redwood City, California-based company said today in a statement. That forecast is below the $1.32 average analyst estimate, according to data compiled by Bloomberg. Sales in the current quarter are projected to be $1.65 billion, also below an average analyst estimate of $1.75 billion.
“There’s still a lot of uncertainty in the business,” Chief Financial Officer Blake Jorgensen said in an interview. “But we’ve got our heads down and are delivering what we think are fantastic products in the marketplace.”
Electronic Arts is transitioning from a maker of games sold mostly at retail stores to one that plans to generate the bulk of its revenue from digital downloads within the next five years. The third-quarter projection accommodates increased marketing costs and revenue from some games consumers will be purchasing for new consoles that will be deferred until the fourth quarter, Jorgensen said.
Electronic Arts fell 2.8 percent to $24.13 at the close today in New York. The shares are up 66 percent this year on optimism that new CEO Andrew Wilson can deliver solid digital results while benefiting from the introduction of next-generation consoles next month from Sony Corp. and Microsoft Corp.
In the second quarter ended in September, profit excluding some items totaled 33 cents a share, compared with 15 cents a year earlier, Electronic Arts said. That beat the average analyst estimate of 12 cents gain. Sales before changes in deferred revenue fell 3.7 percent to $1.04 billion, surpassing an estimated projection of $977.7 million.
Online sales rose 39 percent to $450 million, on titles including “Plants vs. Zombies 2,” “FIFA” and “Real Racing 3.” Like other game makers, Electronic Arts has reduced the number of packaged titles it makes for consoles to devote more resources to the Web.
The net loss in the three months ended Sept. 30 narrowed to $273 million, or 89 cents a share, from $381 million, or $1.21 a year earlier.
Electronic Arts said yesterday that Tiger Woods will no longer be associated with its golf title, after the maker of “Tiger Woods PGA Tour” made a mutual decision with the golfer to end their 15-year partnership.
Last month, the company said it has agreed to stop making college football games after settling a lawsuit brought by former players from the National College Athletic Association who said they weren’t being compensated for their likenesses.
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