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View Vexes Electronic Arts

Priya Ganapati

Video-game publisher Electronic Arts(ERTS Quote) beat fourth-quarter analysts expectations but guided lower for the coming quarter and fiscal year.

EA said Tuesday its fourth-quarter loss widened to $25 million, or 8 cents as hare, from $16 million, or 5 cents a share, a year earlier.

Excluding stock-based compensation charge of $24 million, the company earned 6 cents a share, or $19 million, compared with 14 cents a share, or $43 million in the prior-year's quarter. On that basis, it beat Thomson First Call estimates of 2 cents a share.

Revenue for the quarter ended March 31 was $613 million, down 4% compared with $641 million for the prior year, primarily because of the market's transition to next-generation consoles, said EA. Analysts had been expecting, on average, $586.3 million.

Shares of Electronic Arts were recently off $1.34, or 2.5%, to $51.60 in after-hours trading.

"We want to focus on improving execution and predictability," said John Riccitiello, EA's new CEO, who took over the reins from from Larry Probst, EA's current chairman, on April 2.

"We are working to align our team to be faster and better focused on opportunities and accelerate ahead," he said.

On a conference call with analysts, EA declined to commit to a launch date for its much-awaited PC game, Spore.

EA said the game could be out in the fourth quarter of fiscal 2008 or be pushed to early 2009. "Our focus is quality over speed," said Riccitiello. "We want to make sure with Spore we build a sustainable franchise along the lines of Sims and not release something that is goes just one or two titles."

Analysts were expecting the game to start selling in fiscal 2008.

For the first quarter, excluding items, the Redwood City, Calif.-based company forecast an EPS loss between 34 cents and 40 cents on sales between $350 million to $400 million, significantly wider than analysts' forecast of a loss of 9 cents a share on revenue of $460.6 million.

For the full fiscal 2008, EA sees EPS of 90 cents to $1.20, excluding items, vs. the $1.34 estimated by analysts. The company guided sales at $3.1 billion to $3.4 billion, lower than consensus of $3.61 billion.

For the fiscal year ended March 31, the company said seven of its games sold more than 3 million copies.

EA expects to launch more than 15 of its wholly owned games this fiscal year.

Full-year revenue in North America was up 5% to $1.66 billion, Europe grew 7% to $1.26 billion, and Asia was down 15% to $164 million.

Foreign currency rates boosted net revenue by $53 million, or 2%, EA said.

Revenue from games on handhelds, cellular handsets and other mobile devices rose 37% to $540 million in the year, attributable primarily to cellular handset revenue from the acquisition of Jamdat Mobile and sales growth on the Nintendo DS, said EA.

Madden NFL 07 was the industry's most popular game of 2006 in North America and was EA's top seller for the fiscal year.

Need for Speed Carbon sold more than 8.5 million copies, making it EA's second-best-performing title.

Games from the Sims franchise sold 22 million copies in the year, with The Sims 2 Pets selling 5.6 million copies and The Sims 2 selling 3.9 million copies.

The company, which completed five acquisitions during the year, made a 19% equity investment in the South Korean game developer Neowiz.