f13.net forums - EA profits down $82 million. Haemish dances a jig.

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July 20, 2025, 07:58:57 PM

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Quote from: Reuters

UPDATE 2-Electronic Arts sees first-qtr loss, stock sinks
Tue May 3, 2005 04:57 PM ET

By Ben Berkowitz and Lisa Baertlein

LOS ANGELES/SAN FRANCISCO, May 3 (Reuters) - Electronic Arts Inc. (ERTS.O: Quote, Profile, Research) , the world's largest video game publisher, on Tuesday reported a lower profit for the fiscal fourth quarter and its shares tumbled 8 percent as it forecast a net loss for the current quarter.

That outlook was well below Wall Street estimates and shares in other major video game publishers fell as well.

"I think this is all catalogue driven," said Michael Pachter, an analyst at Wedbush Morgan, referring to the company's older library of games.

"I think their catalogue has gotten very weak because they don't have as competitive a lineup for the last six months as they did in past," Pachter said.

Redwood City, California-based EA reported a net profit of $8 million or 2 cents per share -- compared with a year-earlier profit of $90 million, or 29 cents per share -- as it suffered broadly weak sales of both its newer games and older titles from last holiday season.

Excluding items, its profit in the recently completed quarter was 9 cents a share. Revenue fell to $553 million from $598.4 million a year earlier.

Analysts polled by Reuters Estimates expected earnings per share of 9 cents before items and net earnings of 7 cents a share on revenue of $538.0 million.

On March 21, EA issued a mid-quarter profit warning for the first time in its history, citing weak game sales and hardware shortages.

EA Chief Financial Officer Warren Jenson told Reuters the quarter ended basically as the company expected after its warning, but he added that the hardware shortages that plagued EA in the first quarter have continued.

"If you asked retailers ... I think they'd all love to have more," Jenson said. "There is some supply constraint."

Jenson also said EA took a $21 million reserve in the quarter for employee-related litigation.

OUTLOOK BELOW FORECASTS

For the first quarter ending in June, EA forecast revenue of $300 million to $340 million and a diluted net loss per share of between 22 cents and 28 cents.

Analysts' average call had been for a net profit of 5 cents on revenue of $448.2 million. None of the analysts surveyed forecast a loss in the quarter.

For the fiscal year ending March 31, 2006, EA called for revenue of $3.4 billion to $3.5 billion and diluted net earnings of $1.55 to $1.70 a share.

For fiscal 2006, analysts' average targets were for net earnings of $1.71 a share on revenue of $3.4 billion.

EA shares fell to $48.67 in after-hours trade on Inet from a $52.90 Nasdaq close. Shares in THQ (THQI.O: Quote, Profile, Research) fell nearly 6 percent and shares in Activision (ATVI.O: Quote, Profile, Research) fell nearly 3 percent as well on Inet.

Quote from: Reuters

"I think this is all catalogue driven," said Michael Pachter, an analyst at Wedbush Morgan, referring to the company's older library of games.

Ya think?

How can they be suffering from a hardware shortage? What does that mean? They can't press enough CDs? I don't understand that at all. It's not like this is the days of the N64 and SNES when manufacturing cartridges was a real issue.

The problem EA has is they don't have a steady revenue stream other than their sports titles. The buy and kill off strategy is only going to work for so long. It's pretty sad when you look at the catalogue of games they COULD have. But instead they buy a developer, put out one game, then axe it.

Quote from: Margalis on May 03, 2005, 04:22:28 PM

No what they mean is there has been a shortage of console systems (PS2 and Xbox):

http://biz.gamedaily.com/features.asp?article_id=9410

Even a couple of weeks ago when I went to buy an Xbox at Fry's they said they were sold out at all their stores cause of the supply shortage. Best Buy had them in stock, though, so that's where I got mine.

I find it really hard to believe that that would significantly effect the sales of EA games though. At this point it's hard to imagine that monthly sales are going to add a lot to the total existing numbers. It seems very odd to me that 2 or 3 years into the life of a system a software company can say they are losing money because not enough new systems are being sold. What about the existing installed base?

I'm finding it difficult to believe any of you think anything that comes out of EA's PR mouths is less than complete bullshit.

Hardware sales is an excuse. It ALMOST makes sense, considering the shortages were hitting during holiday months AND during the first ramp up of the 2005 year, the March first assault of new releases. It just so happens that EA hasn't released much of shit that's new and worthwhile, other than sports titles for consoles. Their NHL game couldn't have sold that well, considering there was no hockey season, so why bother getting a new hockey game which will really only be an inaccurate roster update and some tweaks. Their baseball game has gotten solid competition from ASB and ESPN MLB (for only $20 so they get killed on price point). They have no hit games or Sims expansions released this year.

Suck it, EA bitches. I'm sure you'll pull it back out when you release your exclusive only NFL game this fall. You fucking cockwhores.

Quote

Suck it, EA bitches. I'm sure you'll pull it back out when you release your exclusive only NFL game this fall. You fucking cockwhores.

Stan the Man, give this kid a no-prize!

It would be interesting to see how much of an effect WOW is having on people buying games.

Of course - it could also be that EA can't depend on the SIMs to keep selling forever.

Didn't they name WoW as one of the factors?

Quote from: Hoax on May 04, 2005, 10:49:46 AM

Didn't they name WoW as one of the factors?

I think the direct quote was "Wow- our stable of games sucks." Take that how you will.

Quote from: ahoythematey on May 04, 2005, 08:25:19 AM

I'm finding it difficult to believe any of you think anything that comes out of EA's PR mouths is less than complete bullshit.

Normal PR in one thing, financial PR is quite another. In this day and age and with a company of EA's size, it's a pretty risky move to lie about your financials, which is not to say that there aren't lots of companies still doing that sort of thing but EA has never had the reputation for "stretching the truth" about their financials AFAIK.

Dodging the reasons why those financials suck, however? EA's ALL OVER that one.

Quote from: HaemishM on May 04, 2005, 08:43:14 AM

Actually, they did release Sims2 University in March, and are getting ready to release a second expansion. It's really sad that I know this. I'm guessing that those weren't enough for them. What about UO - Ninjas!!, wasn't that supposed to save the bottom line?

Nothing can save UO's bottom line this late in the game, other than UO4.573 Odyessy World of Shadow XxX!

Starring Ice Cube.

Quote from: HaemishM on May 05, 2005, 07:46:49 AM

Dodging the reasons why those financials suck, however? EA's ALL OVER that one.

Two reasons why.

1) Their development Expenses are starting to outpace their Sales, General, & Admin expenses. From 95-03 this wasn't the case. That's bad news.
2) In 2003 they jumped from $6.9M -> over $600M in short term investment assets, all of which were part of US Agency Bonds. This inflated the earnings because of the returns based on those Agency bonds.