EA Lowers Profit Forecast, Reveals Plans To Cut Jobs After Q2 Loss
Electronic Arts (EA) Thursday reported a loss of $310M ($0.97 per share) for FY Q2, and the company "lowered its profit forecast for the year and said it planned to cut its workforce about 6%," according to Alex Pham of the L.A. TIMES. The loss is "steeper than the loss" of $195M ($0.62 a share) for the year-ago period. While increased spending on game marketing and development "hurt the bottom line," revenue climbed 40% from $640M to $894M due to "brisk sales" of "Madden NFL 09," "Spore" and "Warhammer Online." EA said that it "plans to eliminate 500 to 600 of its 9,400 jobs to try to save" expenses. The company also said that it is "still poised to ring up double-digit sales increases" for the FY ending March 31, with revenue of $4.9-5.15B, up from $3.7B last year. EA added that it "wasn't sure whether it would make or lose money for the year." The company projected per-share earnings of "between a loss of 21 cents and a profit of 7 cents." Last year, EA lost $1.45 a share (L.A. TIMES, 10/31). DAILY VARIETY's Ben Fritz reports EA previously had "expected a profit" of $0.21-0.48 per share for the FY ending March 31. Meanwhile, EA's "Madden NFL 09" sold 4.5 million units in Q2, "on par with the '08 edition" (DAILY VARIETY, 10/31). The company said that it is "too soon to tell if the ailing and volatile economy would hinder what is otherwise expected to be a strong holiday season for the video game industry" (N.Y. TIMES, 10/31). At presstime, EA shares were trading at $23.16, down 16.5% from Thursday's close at $27.73 (THE DAILY).
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