Loss Widens at Electronic Arts
Updated from 5:05 p.m. EDT
Video game publisher Electronic Arts (ERTS) posted weak revenue and a wider loss in the first quarter and guided below analysts' expectations for the second quarter.
The company's loss was $132 million, or 42 cents a share, compared with a loss of $81 million, or 26 cents a share, a year earlier.
Excluding charges, the company posted a loss of 22 cents a share. On that basis, it beat Thomson First Call estimates of a loss of 35 cents a share.Revenue fell 4% to $395 million. Analysts polled by Thomson Financial were expecting revenue of $385.9 million. Beginning this quarter, EA said it won't charge for hosting services for some of its online packaged goods games and will instead start recognizing revenue from the sale of these games over the hosting service period. The change will result in a $36 million sequential increase as of June 30 in deferred net revenue, which will be recognized in future quarters. The move has "materially impacted" the company's results, said EA. Shares of Electronic Arts were off 23 cents, or 0.4%, to $47.87 in recent after-hours trading. EA said it will launch 10 new games this fiscal year, including Boogie, EA Playground, Army of Two, Skate, Warhammer Online, The Simpsons Game, Smarty Pants, a yet to be named game for Nintendo's Wii that EA is jointly developing with Steven Spielberg, Rock Band and Crysis.
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