Publisher's share price plummets in after-hours trading following revised earnings annual earnings estimate; slow holiday sales blamed.
Much like it did in 2009, Electronic Arts began the New Year with some disappointing news. Today after trading ended on the New York markets, the publisher announced it was lowering its earning estimates for the fiscal year ending March 31, 2010. The Redwood City, California-based company now expects net revenue between $3.6 billion and $3.675 billion for the year, down from the previously forecast range of $3.6 billion to $3.9 billion. It now anticipates per share losses between $1.94 and $2.24, up from a range of $1.20 to $2.05.
"Revised fiscal year 2010 expectations are primarily the result of weakness for EA and the overall packaged goods sector in Europe in December, and a product mix shift to lower margin distribution products in the December quarter, primarily in North America," the company said in a statement.
For the October-December quarter, the company now expects losses of between $0.24 to $0.32 per share on revenues of $1.227 billion to $1.247 billion. During the period, EA had several high-profile releases, such as FIFA Soccer 10, BioWare's Dragon Age: Origins, and The Saboteur, the last game from Pandemic Studios before most of its staff was laid off. The company also published Valve Software's Left 4 Dead 2 under its EA Partners program.
Though EA shares ended the day down just $0.13 in regular trading, after-hours traders reacted swiftly--and negatively. A half-hour before EA executives were scheduled to hold a 2 p.m. PST conference call with analysts, the company's stock had fallen more than $1.70 per share--over 9 percent of its value.
Today's announcement is the latest bad news to emerge from the former top third-party publisher. In November, EA announced the layoffs of 1,500 employees, roughly 17 percent of the company's workforce, and the cancellation of over "a dozen" games. That move came less than a year after the publisher's previous major restructuring, in which it cut 1,000 employees from its global payroll.
"Revised fiscal year 2010 expectations are primarily the result of weakness for EA and the overall packaged goods sector in Europe in December, and a product mix shift to lower margin distribution products in the December quarter, primarily in North America," the company said in a statement.
For the October-December quarter, the company now expects losses of between $0.24 to $0.32 per share on revenues of $1.227 billion to $1.247 billion. During the period, EA had several high-profile releases, such as FIFA Soccer 10, BioWare's Dragon Age: Origins, and The Saboteur, the last game from Pandemic Studios before most of its staff was laid off. The company also published Valve Software's Left 4 Dead 2 under its EA Partners program.
Though EA shares ended the day down just $0.13 in regular trading, after-hours traders reacted swiftly--and negatively. A half-hour before EA executives were scheduled to hold a 2 p.m. PST conference call with analysts, the company's stock had fallen more than $1.70 per share--over 9 percent of its value.
Today's announcement is the latest bad news to emerge from the former top third-party publisher. In November, EA announced the layoffs of 1,500 employees, roughly 17 percent of the company's workforce, and the cancellation of over "a dozen" games. That move came less than a year after the publisher's previous major restructuring, in which it cut 1,000 employees from its global payroll.
MovieMiguel.com
