Electronic Arts Releases Lower, Better Than Expected Financials

Game publishing and development giant Electronic Arts has released the results of its second quarter for the 2006 fiscal year, ending September 30, 2005. Though the game giant's revenue and profit both decreased, compared to the same period last year, stock prices went up as EA managed to beat analyst guidance for the quarter, a key arbiter. Net revenue for the quarter for EA was $675 million, down 6 percent from Q2 2005's $716 million. Profit took a larger hit: the Q2 take was $51 million, down 52% from 2005's $97 million. However, shares for the company rose 2 percent following the news, closing at $55.79 per share, and continuing up to $56.55 in after-hours trading. Successful releases for the company during the second quarter included Madden NFL 06, NCAA Football 06, FIFA 06, NBA Live 06, Burnout Revenge, and The Sims 2: Nightlife, each of which sold over a million copies. Titles selling more than 500,000 were Tiger Woods PGA Tour 06, NHL 06, and NASCAR 06: Total Team Control. The company has updated its guidance for analysts and investors as a result of the Q2 results. The new outlook expects third-quarter holiday revenue between $1.475 and $1.575 billion, with revenue for the year between $3.25 and $3.4 billion. The company's holiday lineup will consist of Need for Speed: Most Wanted, Harry Potter & the Goblet of Fire, console versions of The Sims 2, James Bond: From Russia With Love, and the just-released Battlefield 2: Modern Combat, among others. "We are well prepared for the launch of Xbox 360," said EA CEO Larry Probst, about the major console release occurring this holiday season. "We plan to release five blockbuster games -- FIFA 06, Madden NFL 06, NBA Live 06, Need for Speed Most Wanted and Tiger Woods PGA TOUR 06 on this exciting new platform. These titles will demonstrate to consumers the amazing capabilities of next-generation hardware." Other highlights in the financial report were a breakdown of the company's revenue by platform. 45% of the company's revenue over the second quarter came from PlayStation 2 releases, while Xbox got 20%, PC had 14%, PSP had 7%, GameCube got 4%, and the Nintendo DS and Game Boy Advance each had 1%.