EA beats guidance as sales shrink, losses deepen
Publisher notes difficulty of generational transition, weak sales on legacy platforms
Electronic Arts today released its financial results for the holiday quarter, beating its forecasts but falling short of the previous year's holiday numbers.
For the three months ended December 31, EA posted revenues of $808 million, down 12 percent year-over-year, but still better than the $775 million it expected in its guidance for the quarter. The publisher also posted a net loss of $308 million. Again, that's better than the $439 million loss it projected, but worse than the $45 million net loss it posted over the 2012 holiday quarter.
"In a transitional quarter, EA delivered EPS results above our guidance driven by strong sales of our next-generation console titles, continued growth in our digital games and services, and financial discipline across the business," CFO Blake Jorgensen said.
As far as highlights went, EA boasted that it was the number one publisher in the West during December on the PlayStation 4 and Xbox One, citing a lineup led by Battlefield 4, Madden NFL 25, FIFA 14, and Need for Speed Rivals. EA also released NBA Live 14 on those platforms and Peggle 2 on Xbox One during the quarter. The publisher said its lineup combined to account for 35 percent of PS4 and Xbox One software sales in the West during the quarter.
EA also touted its digital revenues, saying they jumped 27 percent year-over-year to $517 million on a non-GAAP basis. The company's mobile and handheld digital sales were up 26 percent during the quarter to $125 million, while the year-to-date totals of its microtransaction-driven Ultimate Team modes in its FIFA, NFL, and NHL games has grown 60 percent year-over-year.
Despite that growth in digital, EA is actually expecting its packaged goods business to show more growth for the full-year. EA is expecting packaged goods sales of $2.21 billion, up nearly 4 percent, while digital sales slow their growth to end the year at $1.70 billion, up just over 2 percent. Overall revenues for the fiscal year ending March 31 are expected to come in at $3.91 billion, which would be up 3 percent from the year prior. However, that's still a downgrade from previous guidance, a move Jorgensen said was prompted by "weakness in current generation software."
For the fiscal fourth quarter on its own, EA is expecting to post a net income of $230 million on revenues of $1.07 billion. Over the comparable stretch last year, the company posted a net income of $323 million on revenues of $1.21 billion