EA's Net Up on Strong Game Sales

EA beat analyst estimates and guided revenue higher for the current fiscal year
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Updated from 04:29 PM EDT

SAN FRANCISCO -- Video-games publisher

Electronic Arts

(ERTS)

blew past analysts' estimates for the fourth quarter but shares fell after the company said it expects profits in the first half of the current fiscal will be lower than Street expectations.

Electronic Arts reported a net loss of $94 million, or 30 cents a share, in the quarter vs. a loss of $25 million, or 8 cents a share, the same quarter a year ago due to acquisition related charges.

Excluding charges, EA reported net income of $30 million, or 9 cents a share, compared with $19 million, or 6 cents a share, a year ago.

Net revenue for the quarter rose 50% to $919 million from $613 million a year ago.

Analysts polled by Thomson Reuters had been expecting break-even EPS on revenue of $834.82 million.

Shares of EA were down $1.77, or 3.2%, to $52.80 after initial gains of about 2.5% in extended trading.

EA also said it will stop offering quarterly guidance in a bid to focus investors on the company's long-term commitments.

"Our business is seasonal and hit driven," said Eric Brown, chief financial officer of Electronic Arts. "If we delay a title from one quarter to next it can have no impact on annual guidance but it does affect our quarterly numbers."

Sales in the fourth quarter were driven by the launches of

Army Of Two

,

Burnout Paradise

and ongoing sales of

Rock Band

, said EA.

Including all charges, EA reported net revenue of $1.127 billion. During the quarter, EA had a net benefit of $208 million related to the recognition of deferred revenue for certain online enabled packaged goods games.

During the fiscal year, EA had 27 titles that sold more than one million copies, compared with 24 titles in the prior year.

For the current fiscal 2009, EA said it expect revenue to be between $5 billion and $5.3 billion. Earnings excluding items are expected to range from $1.30 to $1.70 a share. Analysts are expecting earnings of $1.73 a share on revenue of $4.5 billion.

"We are looking to adding more than a $1 billion in revenue next year," said Brown. "Our guidance is based on all the titles that we own and have under control and does not rely on any revenue from

Take-Two

(TTWO) - Get Report

." EA is in the midst of a $2 billion hostile buyout for Take-Two.

EA's tender offer for Take-Two shares at $25.74 a share is set to expire Friday. Take-Two's management has already twice rejected the proposal on the belief that EA's offer significantly undervalues the company.

On the conference call with analysts, John Riccitiello, CEO of EA, did not offer any new comments. EA's bid for the Take-Two takes into account

Grand Theft Auto IV's

success, he said.

Grand Theft Auto IV

sold more than 6 million copies within the first week of its release in North America and pulled in $500 million in revenue.

EA also continues to work with the U.S. Federal Trade Commission, which is looking into the takeover. "I don't believe our proposal is in any way anti-competitive," Riccitiello told analysts.

The company said it plans to release 15 new games during the current fiscal.

EA's biggest rival

Activision

(ATVI) - Get Report

also reported higher-than-expected numbers last week when

it blew past

analysts' estimates for the previous quarter and offered strong outlook for the current year.