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Barry
Mr. Do It All
Feb 4, 2006, 8:02 AM
Post #1 of 1
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EA 4th Quarter 2005 results down
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EA profits fall by nearly a third as consumers' waited to switch to new models of game consoles, helping to curb sales and profits. EA said it earned $259 million, or 83 cents per share, for the three months ended Dec. 31. That marked a 31 percent drop from the year-ago period, when the company posted a profit of $375 million, or $1.18 per share. Revenue fell to $1.27 billion, down 11 percent from $1.43 billion in the prior year.
EA shares fell 44 cents to close at $53.14 Friday on the Nasdaq Stock Market. Its shares have traded in a 52-week range of $47.45 to $71.16. EA laid off several hundred employees this week — 5 percent of its global work force of 6,500 — saying the move would help cut costs and shift resources amid changing business strategies and the revenue-slowing transition to new gaming machines.
The company also predicted a loss in the current quarter. EA said it expects a net loss between 15 cents and 23 cents a share on revenue between $550 million and $600 million. The company said the forecast includes a 17 cent-a-share charge from its $680 million acquisition of mobile game publisher Jamdat Mobile Inc., a 9 cent-a-share tax charge and a 4 cent-a-share restructuring charge.
EA executives acknowledged in a conference call with analysts that they
did not expect the drop to be as steep as it turned out. "We
underestimated the impact of consumers sitting on the sidelines," said
Larry Probst, EA's chairman and chief executive.
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