It's Time to Test EA's Game Plan

Video-game publisher Electronic Arts(ERTS) is a company in transition.

EA is struggling to retain its position as the market leader even while restructuring its business units last month, when it brought in new hires to revitalize its game development and publishing process.

EA's first-quarter fiscal 2008 results are likely to reflect some of these challenges with losses up from a year ago.

Analysts will also be closely watching new CEO John Riccitiello for clues about his plans to further cut costs and release innovative and cost-effective games.

"I am much more confident about their prospects now than I was nine months ago," says Roger Ehrenberg, president of Monitor 110, which offers a real-time online information monitoring service for institutional investors.

"John really understands the importance of building a mass-market franchise and going beyond hardcore gamers," says Ehrenberg, who does not own any shares of EA.

In the first quarter of fiscal 2008, analysts polled by Thomson Financial expect the company to post a loss of 35 cents a share, up from a loss of 12 cents a share in the year-before quarter. Revenue for the quarter is likely to hit $389.4 million, down from $413 million a year ago.

For the second quarter, analysts are expecting revenue of $960.1 million, up from $784 million, and earnings of 34 cents a share.