No Holiday Cheer From Electronic Arts

Electronic Arts (ERTS) gave a downbeat update on its holiday results on Thursday.

Following the company's reporting late last month that it had seen weak sales in the first part of November, CFO Warren Jenson said Thursday that although sales picked up in North America during the week of Thanksgiving, they turned weak again in Europe and North America -- the company's two major markets -- in early December.

"There are obviously many critical selling days left in December. That said -- we wanted to let you know what we are seeing -- by and large the trend has been negative," Jenson said on a conference call discussing the company's agreement to acquire Jamdat (JMDT).

EA predicted last month that holiday-quarter sales would range from 3% to 10% above what it posted in the same period last year.

EA was at a loss to explain the weak sales results. Company management feels like its products are competitive, Jenson said. And EA doesn't believe that sales of products such as Apple's (AAPL) iPods are hindering video game sales this holiday season, company CEO Larry Probst said.

"We asked some of our key accounts that same exact question. Their answer is, 'No,'" he said. "I think they're the best barometer, and they don't see it."

Jenson declined to say whether or not the EA would issue an earnings warning due to the soft sales.

"Our objective is to tell you what we know," he said. "I'm no way in a position to make an announcement at this time."

Shares of EA fell in after-hours trading following its sales update. In recent exchanges, the company's stock was off $1.41, or 2.5%, to $54.34. EA shares closed regular trading Thursday off 84 cents, or 1.5%, to $55.75.

The update from EA follows foreboding news from the industry.