EA reports smaller than expected loss

Electronic Arts today released financial results for the first quarter that ended on June 30 of this year. While the news is grim, there is somewhat of a silver lining for one of the world’s largest game publishers. First and foremost, changes in accounting rules for deferred revenue impacted sales for the quarter coupled with a seasonal slump in the industry during the three month period.

EA reported a loss of $234 million, or 72 cents per share, before adjustments in the April to June period, compared with a loss of $95 million, or 30 cents per share, in the same quarter a year earlier. During the quarter, the company recorded a net revenue deferral of $172 million related to online-enabled packaged goods games and digital content as compared with a net benefit of $195 million in the first quarter of the prior year.

Revenue for the quarter also fell 20 percent to $644 million from $804 million a year ago. Excluding restructuring charges and various adjustments, EA lost 2 cents per share in the latest quarter. The good news is that EA managed to beat “the street,” who expected the company to post a loss of around 13 cents a share.

Some other good news: adjusted revenue for the first quarter clocked in at $816 million, up an impressive 34 percent from last year - way above the $729.5 million range that analysts had predicted.

Highlights for the first quarter included doubling sales of Wii games thanks to EA Sports Active (which sold over 1.8 million copies), 3.7 million copies of The Sims 3, $50 million of non-GAAP revenue in the quarter from EA Mobile (up 14 percent), and EA Digital non-GAAP revenue of $124 million (up 38 percent year-over-year).

Looking ahead the company expects better days in the second quarter. Madden NFL 10, which will be available on August 14 for various platforms, should give EA a large boost in sales numbers. EA also plans to sell virtual items in The Sims 3, as well as subscription-based online games - though that particular space, save Ultima Online, hasn’t been a successful sector for EA over the years.

EA expects GAAP net revenue to be between $3.7 and $3.85 billion; non-GAAP net revenue of approximately $4.3 billion; a GAAP diluted loss per share between $0.85 and $1.35; and non-GAAP diluted earnings per share of approximately $1.00.

Sony Posts Epic Loss, PS3 Price Cut Rumored

Hard times for Sony this week as it announced a staggering net loss of 165.1 billion yen ($1.7 billion) for the fourth quarter and a net loss of 98.9 billion yen, or 98.59 yen per share, for the fiscal year ended March 31. This rather sad occasion is punctuated by the fact that it is the first full year loss in 14 years. The company had posted a net income of 29.0 billion yen for the January-March quarter a year ago. In the fiscal year ended March 2008, it had a net income of 369.4 billion yen.

Sony puts some of this bad news off on its electronics segment, which dropped 17 percent in the fiscal year, and a decline to a stronger yen, deterioration in the business environment and “intensification of price competition.” The only silver lining? The company’s loss was less than analysts expected. Analysts were expecting a net loss of 228.7 billion yen for the quarter and 173.8 billion yen for the year, while Sony had said it was expecting a loss of 150.0 billion yen for the full year.

And on a related note, analysts say that this highlights the need for a PS3 price cut, and one in particular is predicting that it will finally happen. Lazard Capital Markets analyst Colin Sebastian believes that Sony will cut the price of its rather pricey console by about $100 USD. Sony says that it will see a 30 percent sales increase for the PlayStation 3 in fiscal 2010 - which means it is either delusional (at its current price) or that a price cut is in the works. Coupled with some solid PS3 titles like inFAMOUS, God of War III, Heavy Rain, Uncharted 2 and Gran Turismo 5 coming out in FY 2010, A price cut really could save Sony’s bacon.

We’ll know more, no doubt during E3 in the first week of June.

THQ Post Q4, FY 2009 Results

THQ’s financial results for the fourth quarter and fiscal year ending March 31, 2009 are nothing to be excited about. For the full year that ended on March 31, the company posted net sales of $830.0 million down from almost $1.03 billion a year ago. On a non-GAAP basis net sales were $812.6 million, compared with $1.061 billion in the prior year. The company also reported a wider net loss than last year: $431.1 million ($6.45 per share) compared to $35.3 million ($0.53 per share). non-GAAP net loss was $101.8 million, ($1.52 per share), compared to $13.6 million ($0.20 per share). Not pretty.

Fourth Quarter FY 2009 weren’t any better. For the fourth quarter of fiscal 2009, THQ reported net sales of $170.3 million, compared with $187.0 million for the same period a year ago. On a non-GAAP basis, the company reported net sales of $154.3 million, compared with $217.6 million for the same period a year ago.

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EA Reports Q4, FY 2009 Results

Electronic Arts announced preliminary financial results for its fourth quarter and fiscal year ended March 31, 2009. The news and the numbers are not so good. GAAP net revenue for the fourth quarter was $860 million, down $267 million as compared with $1.13 billion for the prior year. During the quarter, EA had a net benefit of $251 million related to the recognition of deferred net revenue for certain online-enabled packaged goods games and digital content.

Non-GAAP net revenue was $609 million, as compared with $919 million for the prior year. Sales were driven by Skate 2, Rock Band 2, The Lord of the Rings: Conquest, Left 4 Dead and Need for Speed Undercover.

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