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EA beats expectations for Q2 despite decline in profits

Publishing giant Electronic Arts has reported a decline in its revenues and profits for the quarter ended September 30th, but the markets have responded positively to the news that the firm's figures were better than analysts had expected.

Publishing giant Electronic Arts has reported a decline in its revenues and profits for the quarter ended September 30th, but the markets have responded positively to the news that the firm's figures were better than analysts had expected.

Net revenue for the quarter was $675 million, with profits of $51 million - a fairly major drop from last year's profit of $97 million on revenues of $716 million, but analysts had been expecting revenues of under $640 million.

Although the quarter was weaker than the previous year's, it still saw six games selling over a million copies - Madden NFL 06, NCAA Football 06, FIFA 06, NBA Live 06, Burnout Revenge and The Sims 2: Nightlife - while three more sold over half a million units, namely Tiger Woods PGA Tour 06, NHL 06 and NASCAR 06.

Perhaps unsurprisingly, given that line-up of titles, EA achieved its largest market dominance ever in the sports category during the quarter - with 75 per cent of all sports titles purchased carrying an EA logo.

Commenting on the results, both CEO Larry Probst and CFO Warren Jenson were bullish about the prospects for the company going forward towards Christmas, with Probst particularly keen to emphasise the strength of the firm's Xbox 360 line-up, describing the company as "well prepared" for the launch.

FIFA 06, Madden NFL 06, NBA Live 06, Need for Speed Most Wanted and Tiger Woods PGA Tour 06 will all launch on Xbox 360 this year, while the current-generation line-up includes the likes of Harry Potter and the Goblet of Fire, Battlefield 2: Modern Combat, From Russia With Love, Need for Speed Most Wanted and the console and handheld versions of The Sims 2.

However, despite this, EA sounded a note of caution in its projections - the company changed the lower end of its full-year revenue guidance to $3.25 billion from $3.3 billion, but left the top end, at $3.4 billion, untouched.

Guidance for the crucial third quarter also looked slightly disappointing - analysts had been pitching the quarter at around $1.63 billion, according to a poll by Reuters, but EA's bracket shows it falling between $1.48 billion and $1.58 billion.

Author
Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.