By Malathi Nayak
SAN FRANCISCO, July 23 Video game publisher
Electronic Arts Inc said its first quarter loss was
narrower than Wall Street expected because of strong cost
controls and digital sales that offset weak revenue from
Shares of the company, which usually has a light schedule in
the first quarter for the release of its core console games,
were 6 percent higher in after hours trading on Tuesday, at
$25.35 from the close of $23.83.
Adjusted revenue rose about 1 percent to $495 million from a
year ago, exceeding Wall Street analysts' estimates of $453.8
million, according to Thomson-Reuters I/B/E/S. The company
reported an adjusted loss of 40 cents per share compared with
analysts' expectations of a loss of 60 cents per share.
Investors gave the company credit for delivering on top line
growth and margin expansion, while keeping costs in check,
Sterne Agee analyst Arvind Bhatia said.
"But it's a small quarter, so I wouldn't read too much into
it," he said.
Mobile games, online offerings and new digital sales streams
accounted for more than 76 percent of first quarter revenue,
Chief Financial Officer Blake Jorgensen said in an interview.
Aggressive management of operating expenses also helped.
"We still have a substantial amount of risk in the forward
quarters as we lean into our biggest titles, but we're confident
that our action plan for the year in going forward is starting
to fall into place," Jorgensen said.
Electronic Arts has a long lineup of games, including
shooter "Battlefield 4" and a new sci-fi battle game "Titanfall"
for Microsoft Corp's new Xbox One and Sony Corp's
PlayStation 4 consoles that will be released this
Analysts expect that the launch of new consoles will boost
video game hardware and software sales that have been shrinking
month to month since 2012.
"It was a pretty solid quarter driven by digital sales that
tend to carry higher margins," and the company is being
"appropriately conservative" by maintaining its guidance as the
game industry awaits new consoles from Sony and Microsoft,
For the three months ended June 30, the company posted total
revenue of $949 million compared with $955 million a year ago.
It reported a net profit of $222 million, or 71 cents per share,
compared with $201 million, or 63 cents per share a year ago.
The search for EA's next CEO is continuing after John
Riccitiello stepped down as chief executive on March 30, taking
responsibility for missed operational targets. Jorgensen said
the company looking at external and internal candidates.