Electronic Arts lowers 2015 revenue forecast; shares fall
SAN FRANCISCO (Reuters) - Videogame publisher Electronic Arts Inc (EA.O) lowered its 2015 revenue forecast on Tuesday as the arrival of new Xbox One and PlayStation 4 consoles has hurt sales of games for older consoles sooner than the industry had anticipated.
EA's shares were down 1.5 percent in after-hours trading on Tuesday after closing at $24.87 on the Nasdaq.
Electronic Arts, known for its "FIFA" and "Battlefield" games, said it reduced its non-GAAP revenue forecast for the 2014 fiscal year ending in March to $3.91 billion from its previous forecast of $4 billion.
The company, however, raised its earnings forecast for the year, driven by strong cost control measures. It now sees non-GAAP income of $1.30 per share, compared with its previous forecast of $1.22.
For the three months ended December 31, the company posted non-GAAP revenue of $1.57 billion compared with $1.18 billion a year ago. Wall Street analysts had expected revenue of $1.66 billion, according to Thomson Reuters I/B/E/S.
On a GAAP basis, the company posted total net revenue of $808 million compared with $922 million a year ago.
"Revenue is down primarily driven by current-gen software," Chief Financial Officer Blake Jorgensen said in an interview. "It fell off for the whole industry much faster than we had expected, but it wasn't 100 percent offset by strong (sales of) new console software."
For the quarter, non-GAAP net income rose to $398 million, or $1.26 per share, from $176 million or 57 cents per share a year ago, surpassing Wall Street analysts' estimates of $1.23, according to Thomson Reuters I/B/E/S.
The increase was a result of cutting down operating expenses and strong sales of games for the Xbox One and PlayStation 4 consoles and digital offerings, Jorgensen said.
The company reported a quarterly GAAP net loss of $308 million, or $1.00 per share, compared with $45 million, or 15 cents per share, a year ago.
EA has been focused on accelerating sales of its higher-margin digital games, in addition to its packaged console game business. Non-GAAP net revenue from digital offerings grew 27 percent to $517 million from $407 million a year ago, driven by titles including "FIFA Ultimate Team" and "Madden NFL Ultimate Team."
In March, EA will release its exclusive Xbox One title "Titanfall." The sci-fi shooter game is seeing a "positive response," Jorgensen said, without providing details on preorders.