EA Posts Narrower-Than-Expected Loss
Video game publisher Electronic Arts Inc, reported a narrower-than-expected loss and raised its second-quarter earnings forecast, as it sold more copies of the puzzle game "Portal 2" than expected and pocketed more money on digital games.
The company also said it had it had sold 200,000 pre-orders of its highly anticipated massive multiplayer game, "Star Wars: The Old Republic," since the game became open for reservations last week.
"We're well over 200,000 pre-orders in the first five or six days. From an EA perspective, that is significantly greater than any other EA title we've ever had in the first week," said the company's finance chief, Eric Brown, in an interview.
Investors are awaiting this year's launch of "Star Wars: The Old Republic," an online game that EA hopes will rival Activision Blizzard "World of Warcraft," which has more than 12 million subscribers. EA is said to be spending more than $100 million to develop "Star Wars."
EA has not pinned down an exact date for the game's release but said it would come out during the holiday season.
On Tuesday, EA raised its annual revenue outlook to $3.83 billion to $4.03 billion, slightly higher than the amount Wall Street was expecting.
Part of the revenue boost will come from the acquisition of PopCap games. This month, EA said it would buy the maker of "Bejeweled" in a deal worth up to $1.3 billion. The deal will likely close in August, the company said.
EA, which relies on its sports franchises such as "Madden NFL," may also see a revenue boost now that a National Football League season will be played next year. The company has previously said it would sell 30 percent to 45 percent fewer Madden games if a full football season was missed.
On Tuesday, EA said its adjusted revenue fell 3 percent to $524 million. This beat the average analyst estimate of $511 million.
The company's revenue was lower than last year when it released a World Cup-themed soccer game.
EA's revenue in the quarter was boosted by the sale of digital games, which helped the company beat estimates, said Eric Brown, the company's finance chief, in an interview.
"Because the other areas of our business, specifically digital, were growing so quickly, we were able to come in at revenue that was only down 3 percent overall," Brown said.
EA also sold 2 million units of "Portal 2," a game it distributes for the company Valve. The game features robotic characters and puzzles, and can be played on consoles and on PCs.
EA expects a second-quarter loss of 13 cents to 3 cents per share, roughly in line with analysts' estimates.
Excluding deferred revenue, the company reported a loss of $123 million, or 37 cents per share. Analysts on average were expecting a loss of 39 cents a share, according to Thomson Reuters I/B/E/S.
EA, like many video games companies, is starting to offer a wide range of games played over the Internet and on Facebook, to compete with upstarts such as Zynga, which develops simple, casual games.
The company's digital revenue, which comes partly from games that are played on the Internet, rose 11 percent to $209 million.
EA shares rose 1.4 percent in after-hours trading after closing at $23.81 during the regular Nasdaq session.
(Editing by Robert MacMillan, Gary Hill)