EA Blows Another Quarter, Narrowing Portfolio* (ERTS)

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.

Key stats:

  • 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.

See Also:
EA Tightens Its Belt: New Layoffs, Closed Studios
Electronic Arts: Holiday Sales Bad For Us, Too
Price Cuts Coming On EA And Activision Games?

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