For the first time since parting ways with former chief executive John Riccitiello, EA has reported its first fiscal results. The report details a lower-than-expected financial performance for the quarter ending March 31.
EA’s non-GAAP revenues (an alternative earnings measure including cash earnings) were $1.04 billion, up from last year’s $977 million. Non-GAAP earnings (generally accepted accounting principles by investors) were 55 cents per share, up from last year’s 17 cents. Despite this, the earnings were below EA’s earnings target. Its full year fiscal revenues (non-GAAP) were reported at $3.79 billion, down from last year’s $4.18 billion. EA is expecting a loss in the first fiscal quarter ending June 30.
“As we enter a new fiscal year, EA is well-positioned for dynamic growth on next generation consoles, PCs, and mobile platforms” said Larry Probst in a statement. “With world-class games, a rapidly growing digital business, and top-notch creative talent, we are excited about EA’s strategy for FY 2014 and beyond.”
Probst took over after Riccitiello left, whose PopCap acquisition and digital games foray failed to turn EA’s stock price around. Since then, EA has cut nearly 10 percent of its staff.
EA sold 1.6 million copies of SimCity, despite persistent server connectivity issues that turned many off to the franchise and EA in general.
“EA has a solid operating plan with disciplined R&D spending and a sharp focus on delivering the best games and services,” said chief financial officer Blake Jorgensen.
“We are holding our FY 2014 operating expenses flat to the prior year – a significant achievement in a console transition year.”
EA has a big year ahead of it, with its recent announcement of its license with DIsney to produce Star Wars games. Its next big simulation, The Sims 4, is coming in 2014 as well.
“EA and Disney have signed an agreement to create a number of games on the Star Wars franchise,” said EA president of labels Frank Gibeau. “Our agreement unlocks a whole new future of Star Wars games that will span consoles, PCs, tablets, mobile, and more.”
According to Michael Pachter, an analyst with Wedbush Securities, the weak performance of Medal of Honor: Warfighter, the lack of an NBA game, Fuse’s delay and the cancellation of three of EA’s social games contributed to EA’s lackluster earnings report.
On top of that, the next generation consoles have probably (temporarily) hindered EA’s performance. The Wii U is underperforming and Sony and Microsoft have yet to release their systems, and EA has not yet reveled any games for the PS4. That will change when Respawn Entertainment (founded by the co-founders of Infinity Ward) announce their first game at Microsoft’s Xbox revelation event on May 21.
The upcoming Battlefield 4 is also expected to perform very well this fall, and UFC and NBA titles coming in the fiscal year ending March 31, 2014 will help EA get back in form.
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