Electronics Boutique Warns
Investors sold down shares of
Electronics Boutique
(ELBO)
Monday after the company once again sought to lower profit expectations.
The company's disappointing news was wrapped up in its fourth-quarter earnings report on Monday morning. In recent trading following the report, shares were off $2.46, or 6.2%, to $37.03.
The video game software retailer earned $38.07 million, or $1.53 a share, in its fourth quarter. That result was down from a year earlier, when the company earned $39.40 million, or $1.57 a share. The company's total revenue jumped 20.5% to $808.97 million.
The company's bottom line in its just-completed quarter included a one-time, after-tax charge of $2.7 million, or 11 cents a share, related to an accounting change. Excluding the charge, Electronics Boutique would have earned $40.8 million, or $1.64.
That was just above what analysts had projected and in line with the company's own forecast. Sell-siders polled by Thomson First Call had predicted that Electronics Boutique would earn $1.62 a share on $789.73 million in sales. In January, the company announced that its earnings would likely come in at the low end of its previously stated range of $1.62 to $1.72 a share, due to supply constraints that led to
disappointing holiday sales.
For its full fiscal year, Electronics Boutique earned $52.29 million, or $2.13 a share, on revenue of $1.99 billion. In its prior year, the company earned $45.73 million, or $1.80 a share, on total revenue of $1.60 billion.
The company also projected that its first-quarter and full-year earnings may disappoint investors. In the first quarter, Electronics Boutique expects to earn 12 cents to 14 cents a share on revenue ranging from $484.14 million to $499.04 million, or an increase of 30% to 34%. For the full year, the company forecast earnings of $2.34 to $2.44 a share on revenue ranging from $2.29 billion to $2.39 billion, or an increase of 15% to 20%.
Analysts had projected that the company would earn 15 cents a share in the current quarter on $443.28 million in revenue. For the full year, Wall Street was calling for earnings of $2.43 a share -- or 4 cents a share above the midpoint of the company's range -- on revenue of $2.29 billion.
"We believe fiscal 2006 will be a year marked by many exciting developments in the gaming industry. However, it is also likely to be a year of transition as we prepare for the launch of the next generation of consoles," said company CEO Jeffrey Griffiths in a statement.
"The first half release schedule is strong relative to last year. However, we will face tougher comparisons in the third and fourth quarters given the exceptionally strong holiday line-up in 2004. We face some uncertainty surrounding the timing of the new Xbox2 launch, which could cause our earnings estimates to shift between quarters or even years."