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EA expected to post US$ 111 million in losses

Posted Jul 28, 2008 at 5:13AM EST by QJ Staff

Listed in: Wii, PS3, Xbox 360, PC Gaming Tags: Electronic Arts, Forbes

EA expected to post losses of US$ 111 million - Image 1

According to a Forbes report, Electronic Arts is expected to report US$ 111 million in losses at 33 cents per share. This report is for the quarter which ended on June 30.

This loss count doesn't appear to be due to company performance, as they're also expected to post revenues of US$ 633.9 million. Instead, investor expectations look to be the cause, as this is the first quarter in which EA hasn't offered quarterly guidance.

Analysts also noted a couple of additional things that have caused the subsequent analysis of EA's earnings esitmates to end up being all over the map, with estimates ranging from a loss of 10 cents a share to a loss of 46 cents a share. These happen to be the announcement of new IPs (Spore, Mirror's Edge, etc.) and whether or not these said new IPs will get out on time or sell well.

In any event, we'll find out this coming Tuesday what the actual results will be for the company. Stay tuned to QJ for updates on Electronic Arts.

No dice: Take-Two execs slam EA's fith buyout offer

Via Forbes

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Ok, so what this article is *really* saying is that the EA stock has fallen in value of 33 cents a share (reflecting PURELY market-confidence in EA stock). ....But that there is *ABSOLUTELY NOTHING WRONG* with the ACTUAL profit performance of the company.

In other words, if you're an EA stockholder looking to actually INVEST in the company, there is little to be worried about. If you're a Gordon Gekko -style corporate raider whose only interest in stock is its market value (and not dividends from stock) ..... well, then I guess you better hope the hostile takeover of Rockstar succeeds in the near future.

But, honestly: this is just a sickness in America. That somehow earning $633 million is not good enough. --I suppose it'll be a good excuse to fire (*ahem*--sorry: "layoff") some people over the coming months.

# it's not sickness — rollypoly 2008-07-29 07:30

i'm not an expert but i don't think revenue equals profit...

if they report $633 million in revenue AND $111 million in losses, that means it took about $744 million for EA to do whatever it did over that period. EA is currently investing a ton of money in building big new IPs and acquiring dev studios.

to put it another way: net income for EA would be -$111 million, not $633 million.

it is common in business to lose money for periods in an effort to reap larger profits (or any at all, in this case) in the future.

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