The hammering of
continued Tuesday morning, although several rival video-game makers bounced sharply from the lows they hit after last night's profit warning.
Shares of the Redwood City, Calif., software maker were recently down $8.61, or 13%, to $57.74. Electronic Arts stunned gaming investors Monday night by lowering its earnings and sales estimates for the fiscal year ending March 31, citing lower-than-expected sales in North America and Europe.
Wall Street research departments were relatively gentle in the warning's wake. CSFB cut its 2005 earnings estimates for Electronic Arts by 24 cents to $1.71 a share, but maintained an outperform rating on the stock. CSFB noted that while the company cited shortages of the PlayStation 2 console over the holidays, that issue is second to the company's poor-selling games in causing the earnings shortfall.
At UBS, analysts cut their full year 2006 earnings estimate to $1.75 a share from $1.90 a share, but kept the shares at buy with a $76 price target. UBS recommended buying
Other stocks were climbing back from their worst levels, as Wall Street interpreted the miss as specific to Electronic Arts. Shares of Activision, which went as low as $21.75 earlier, were recently at $22.45, down 22 cents.
Take-Two Interactive Software
, which hit $39.10, was last trading at $40.75, down 67 cents. And
, which touched $27.92, recently changed hands at $29.51, off 14 cents.
EA said after the bell Monday that it now expects revenue of $3.1 billion to $3.125 billion with earnings of $1.62 to $1.64 a share, and earnings before items of $1.70 and $1.72 a share.
The company had previously expected revenue of $3.275 billion to $3.325 billion and earnings of $1.82 to $1.87 a share and earnings before items of $1.90 to $1.95.
A Thomson First Call survey of analysts had expected the company to earn $1.93 a share before items on revenue of $3.3 billion.
"These results are clearly disappointing," said Larry Probst, chairman and CEO. "While our new releases are performing reasonably well, they have not been able to offset a significant falloff in catalog sales."
Wedbush Morgan left the stock at hold, while cutting its price target to $58 from $62.