Six weeks ago yesterday, Electronic Arts stunned investors with a hastily arranged conference call. In it, EA CEO Larry Probst alerted the Street that revenues for the fourth quarter--the one that ended March 31, 2005--would be sharply lower than anticipated. Probst girded Wall Street for an anticipated $100 to $150 million shortfall.
Today, the other shoe dropped in Redwood City--but not as far as it might have.
Fourth-quarter revenue for Electronic Arts tallied $553 million, down 8 percent compared to the same quarter a year ago. EA said sales during the quarter were driven by strong sales of The Sims 2, NBA Street V3, Fight Night Round 2, Need for Speed Underground 2, FIFA Street, and TimeSplitters: Future Perfect.
Net revenue for the full year ending March 31, 2005, was $3.139 billion, up 6 percent from the previous year's $2.957 billion. EA reported a profit for the full year of $504 million, off more than $70 million from the previous year's earnings. Profit during the fourth quarter was just $8 million. In an earnings call held after the markets closed today, CFO Warren Jenson called the numbers "an earnings disappointment."
However, this was the first time ever that EA's annual revenues surpassed $3 billion.
EA said it had 31 games that sold more than a million copies during the fiscal year and six franchises that sold more than 5 million: The Sims, Need for Speed, Madden NFL Football, FIFA, The Lord of the Rings, and Harry Potter. The Sims franchise sold more than 16 million games across all platforms during the year, with the Need for Speed franchise selling a whopping 15 million copies.
In after-hours trading, shares of EA were down more than 8 percent; the share price had been up 45 cents to $52.90 in regular trading earlier.