Electronic Arts warns on 2008 profit; shares drop
LOS ANGELES (Reuters) - Electronic Arts Inc. (ERTS.O) posted a wider quarterly loss on Tuesday and forecast fiscal-2008 adjusted profit below expectations, saying its widely anticipated video game, "Spore," could be delayed.
Shares of the world's biggest video game publisher fell 3 percent in extended trading.
The company, which sells games like "Madden," "Need for Speed" and "The Sims," forecast adjusted profit of 90 cents to $1.20 per share for the year, compared with analysts' average target of $1.31. It forecast a net loss for fiscal 2008.
Redwood City, California-based Electronic Arts said it taken out "Spore," a game where players build organisms from scratch, from its financial projections for the fiscal year ending in March 2008, adding that the game could be delayed until fiscal 2009.
In the fourth quarter ended March 31, the company said its net loss widened to $25 million, or 8 cents per share, from $16 million, or 5 cents, in the year-earlier period.
Excluding items, the company earned 6 cents per share versus 14 cents in the year-earlier period.
Revenue fell 4 percent to $613 million from $641 million.
Analysts, on average, estimated a profit excluding items of 2 cents per share on revenue of $586.4 million, according to Reuters Estimates.
This fiscal year, Electronic Arts is booking one-half of its revenue from games that can be played online via personal computers and devices from Sony Corp. (6758.T) (SNE.N) over a six-month period.
Looking ahead, the company, under pressure from investors to deliver stronger growth and to improve game quality, said it expects that $300 million to $500 million in revenue that would have been booked in fiscal 2008 will be booked in fiscal 2009.
"My sense is we can be faster and better focused on capturing opportunities, increasing segment share and overall growth," John Ricctiello, a former senior executive who rejoined the company as chief executive in April, told analysts in a conference call.
Warren Jenson, the chief financial officer, said Electronic Arts continues to expect video game sales in North America and Europe to rise 13 percent to 18 percent for calendar 2007.
Shares, which closed up 3.1 percent to $52.94 on Nasdaq, slipped to $51.30 in extended trade following the company's financial report.
Its stock fell 15 percent in 2005 as the industry began to move to new console technology. The stock lost another 4 percent last year.
