In December, Electronic Arts (ERTS) warned investors its holiday sales were “not meeting our sales expectations.” Things were worse than we feared: in earnings today the company announced a huge miss, earning 56 cents a share when the Street expected 88.
What’s wrong with EA? A tired product lineup. Franchises like Madden NFL, Need for Speed, and the Sims are all showing their age. But music game DJ Hero, recently announced, may give the company a shot in the arm later this year.
- Revenue: $1.65 billion vs $1.90 billion consensus
- EPS: $0.56 vs $0.88 profit consensus
- Full year revenue guidance for FY ending 03/10: $4.2 to $4.35 billion, vs $4.68 billion consensus
- Full year EPS guidance for FY ending 03/10: $1.00 vs $1.09 consensus
The company said its plan is to cut costs: It’s laying off 1,100 people (11% of its workforce), closing 12 studios and publishing fewer games.