Electronic Arts Loses $205 Million and is Looking at a Bad Upcoming Fourth Quarter

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Electronic ArtsElectronic Arts announced the preliminary financial results for its fiscal third quarter ended December 31, 2011. While EA spun the results as positive, the company still suffered a large net loss and expects far worse results in the next quarter. Read on for more details...
For the fiscal third quarter ended December 31, 2011, Electronic Arts expects a net loss of $205 million compared to a net loss of $322 million. EA beat analysts' earnings estimates, but still reported a large net loss (although a smaller loss than the previous year), and tried to focus on strong opening sales of Star Wars: The Old Republic and increases is digital revenue.

While EA's digital efforts did produce dramatically increased revenues from online services and products, and it presented a variety of financial measures that make the company look good, it still lost money according to Generally Accepted Accounting Principles.

EA is also tentative concerning its full-year results. Thanks to the push to support online gaming (partially related to the Star Wars: The Old Republic launch) and the delay of a social game to the next fiscal year, EA expects its fourth quarter to be worse than it previously described. EA is also concerned that one Europe's major retailers will fail, resulting in bad debt and lost sales. All in all, look for the full year results to undo EA's fancy math that makes its third quarter results look at all strong.

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This page contains a single entry by Editor published on February 1, 2012 3:38 PM.

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