EA Posts Wider Loss, Plans Job Cuts

The video game publisher reported slower sales for the quarter.
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Electronic Arts

(ERTS)

widened its loss for its second fiscal quarter on slowing retail sales.

The video game company reported a loss of $310 million, or 97 cents a share, in the quarter compared to a loss of $195 million, or 62 cents a share, a year ago.

Excluding charges, EA lost $20 million, or 6 cents a share, compared with net income of $87 million, or 27 cents a share, a year ago.

Revenue rose 20% to $1.126 billion from $936 million a year ago.

Analysts were expecting a loss of 6 cents a share on revenue of $1.08 billion.

Sales were driven by the launches of

Madden NFL 09, SPORE, Mercenaries 2: World In Flames

and

NCAA Football 09

. EA also noted the continued strength of its game

Rock Band

, which was launched in partnership with Harmonix and

Viacom

(VIA) - Get Report

's MTV Networks.

The

Madden NFL 09

game sold 4.5 million copies and

SPORE

sold nearly 2 million copies in its first three weeks.

Including all charges, EA reported revenue of $894 million, up from $640 million the year before. During the quarter, EA noted a net benefit of $232 million related to the recognition of deferred revenue for some online enabled games.

Shares of EA were down $3.93, or 14.17%, to $23.80 in recent extended trading.

EA, which recently abandoned its attempts to acquire rival

Take-Two Interactive

(TTWO) - Get Report

, also announced plans to reducing the company's workforce by 6% and aims to achieve annual pre-tax savings of around $50 million.

The company also lowered its earnings guidance for 2009 to between $1 and $1.40. EA had previously expected earnings between $1.30 and $1.70.

"Considering the slowdown at retail we've seen in October, we're cautious in the short term," said EA CEO John Riccitiello in a statement.