EA Loses $95 Million in Q1 as Revenues Soar

Electronic Arts has reported its first quarter earnings for the period ended June 30, revealing sales of $804 million, up $409 million from the $395 million for the prior year. The company noted that it 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." Despite the sizable net revenue increase, EA posted a net loss for the quarter of $95 million, which is better than the net loss of $132 million recorded one year ago at this time.

EA pointed to the launches of Battlefield: Bad Company, which sold 1.6 million units, and UEFA EURO 2008, as well as the continued strength of Rock Band as primary drivers of sales.

The company also noted that the Spore Creature Creator has been picked up by 2.5 million users, and more than two million creatures have been uploaded into Sporepedia in six weeks.

Overall, EA said it’s 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.

"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."

Looking ahead, the publisher is quite optimistic, especially given the reception it got to its product slate at E3: "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."

Although EA no longer provides quarterly guidance, for the full year ending March 31, 2009 the company is expecting total sales between $4.9 and $5.15 billion, which would represent a jump between 34 to 41 percent. Earnings per share are expected to be between $0.21 and $0.48 as compared with a loss per share of $1.45 last year.