Electronic Arts back in the black with Bad Company
Electronic Arts snapped a three-year string of losses by posting a profit on higher sales its fourth quarter, fueled by sales of Battlefield: Bad Company 2, Mass Effect 2 and Dante's Inferno.
Sales shot up 14% to $979 million in the quarter ended March 31, shifting the game publisher to a $30-million net profit compared with a $42-million loss a year earlier. It earned 9 cents a share, up from a loss of 13 cents last year.
Could the embattled video game industry be headed for better days? After hitting the skids in 2009, several game companies joined EA in reporting relatively decent quarters. THQ last week said its quarterly losses narrowed as sales grew 16%, while Activision Blizzard Inc. on Thursday said its first quarter profits doubled and sales soared 33%.
“The game industry is starting to emerge from a dark period and is now showing good signs of life,” said Michael Pachter, analyst with Wedbush Morgan Securities.
John Riccitiello, who vowed to cut costs and publish "fewer bigger hits" when he was appointed chief executive of the Redwood City, Calif., company in February 2007, on Tuesday said EA delivered on that promise with 20 titles that scored 80 or more points out of a possible 100 according to Metacritic, a site that averages game reviews across multiple publications.
"EA has turned a corner," Riccitiello said in a conference call with analysts. "We are rebuilding EA's reputation with consumers."
Wall Street, however, was not impressed. Investors drove EA's shares down more than 4% to $18 in after-hours trading following the earnings release. It had gained 56 cents to close at $18.80 earlier in the day.
"They put up solid results," said Todd Greenwald, an analyst with Signal Hill Capital Group who said analysts predicted even bigger profits. "But the expectations were pretty high."
-- Alex Pham
Photo: Screen shot of Battlefield: Bad Company 2, which has sold 5 million copies since launching on March 2. Credit: Electronic Arts