Electronic Arts more than doubled its year-over-year net sales in the fiscal first quarter, the company announced today. Battlefield: Bad Company, which sold 1.6 million copies, played a key role, and UEFA Euro 2008 and the continuing popularity of Rock Band also pitched in, EA said.
The company's total sales were $US 804 million, a $US 409 million increase over last year's first quarter. The company still reported a $US 95 million loss, however, a narrowing from $US 132 million year-over-year.
"We are now seeing the early returns of the change agenda we started last year," said EA CEO John Riccitiello. "Innovation and quality are rising, our games are more accessible and fun, and we have more new titles than at any time in our history. From Spore on the PC to Dead Space on the PlayStation 3 and Xbox 360 to MySims on the Wii and Nintendo DS to Scrabble on the iPhone and Facebook, this is the best title portfolio in the company's history."
Full announcement after the jump.
EA Reports First Quarter Fiscal Year 2009 Results
Battlefield Bad Company Sold 1.6 Million Copies; Madden NFL 09 20th Anniversary Launching on August 12; SPORE Debuts on September 7
REDWOOD CITY, Calif.—(BUSINESS WIRE)—Electronic Arts Inc. (NASDAQ:ERTS) today announced preliminary financial results for its fiscal first quarter ended June 30, 2008.
Fiscal First Quarter Results (comparisons are to the quarter ended June 30, 2007)
Net revenue for the first quarter was $804 million, up $409 million as compared with $395 million for the prior year. During the quarter, EA had a net benefit of $231 million year-over-year related to the recognition of deferred net revenue for certain online enabled packaged goods games.
Non-GAAP net revenue was $609 million, up 41 percent as compared with $431 million for the prior year. Sales were driven by the launches of Battlefield: Bad Company™ and UEFA EURO 2008™, as well as the continued strength of Rock Band™.
Net loss for the quarter was $95 million as compared with net loss of $132 million for the prior year. Diluted loss per share was $0.30 as compared with diluted loss per share of $0.42 for the prior year.
Non-GAAP net loss was $135 million as compared with a non-GAAP net loss of $69 million a year ago. Non-GAAP diluted loss per share was $0.42 as compared with a non-GAAP diluted loss per share of $0.22 for the prior year.
Trailing-twelve-month operating cash flow was $239 million as compared with $243 million a year ago. The Company ended the year with cash and short-term investments of $1.947 billion.
"We are now seeing the early returns of the change agenda we started last year," said John Riccitiello, Chief Executive Officer. "Innovation and quality are rising, our games are more accessible and fun, and we have more new titles than at any time in our history. From SPORE on the PC to Dead Space on the PLAYSTATION 3 and Xbox 360 to MySims on the Wii and Nintendo DS to Scrabble on the iPhone and Facebook, this is the best title portfolio in the company's history."
Highlights (comparisons are to the quarter ended June 30, 2007)
Battlefield: Bad Company, Mass Effect™ for the PC, SPORE™ Creature Creator and the recently launched NCAA® Football 09 debuted with strong quality ratings from critics.
The SPORE Creature Creator is in the hands of 2.5 million users. Over two million creatures have been uploaded into Sporepedia™ in just six weeks.
EA is the number one publisher in North America, with 17 percent segment share and number two in Europe with 14 percent segment share calendar year-to-date.
EA Mobile™ is the world's leading publisher of games for phones - with revenue of $44 million - up 33 percent year-over-year.
EA Partners signed a co-publishing deal with id Software to bring RAGE™ to consumers around the world.
EA acquired Hands-On-Mobile™ Korea, a leading Korean mobile developer and publisher.
EA purchased ThreeSF, developers of an online social network for gamers.
Critics gave EA titles high marks for quality and innovation at the recent E3 industry summit in Los Angeles. Highlights included SPORE, Mirror's Edge™, Dead Space™, Dragon Age™: Origins and Left 4 Dead™ from Valve.
The following forward-looking statements, as well as those made above, reflect expectations as of July 29, 2008. Results may be materially different and are affected by many factors, including: development delays on EA's products; competition in the industry; changes in anticipated costs, expected savings and impact on EA's operations of the Company's reorganization plan; consumer demand for console hardware and the ability of the console manufacturers to produce an adequate supply of consoles to meet that demand; consumer demand for games for legacy consoles, particularly the PlayStation®2; the financial impact of potential future acquisitions by EA, including the potential acquisition of Take-Two Interactive Software, Inc.; the popular appeal of EA's products; changes in foreign exchange rates; the health of the economy in the U.S. and abroad; EA's effective tax rate; and other factors detailed in this release and in EA's annual and quarterly SEC filings.
Fiscal Year Expectations - Ending March 31, 2009
GAAP net revenue is expected to be between $4.9 and $5.15 billion as compared with $3.665 billion in the prior year - up 34 to 41 percent.
Non-GAAP net revenue is expected to be between $5.0 and $5.3 billion as compared with $4.020 billion in the prior year - up 24 to 32 percent.
GAAP diluted earnings per share are expected to be between $0.21 and $0.48 as compared with a diluted loss per share of $1.45 in the prior year.
Non-GAAP diluted earnings per share are expected to be between $1.30 and $1.70 as compared with $1.06 in the prior year.
Expected non-GAAP net income excludes the following pre-tax items from expected GAAP net income:
$100 to $150 million for the impact of the change in deferred net revenue (packaged goods and digital content),
$230 million of estimated stock-based compensation,
$70 million of amortization of intangible assets,
$40 million of restructuring charges,
$6 million of losses on strategic investments,
$2 million in acquired-in process technology,
Non-GAAP tax expense is expected to be $85 to $95 million higher than GAAP tax expense.
In fiscal 2009, the Company began using a fixed, long-term projected tax rate of 28 percent internally to evaluate its operating performance, to forecast, plan and analyse future periods, and to assess the performance of its management team. Accordingly, the Company has applied the same 28 percent tax rate to its fiscal 2009 non-GAAP financial results.