Electronic Arts has reported its earnings for the second quarter of the 2011 fiscal year. For the period ended September 30, GAAP net revenues declined from $788 million to $631 million, but importantly, net loss was shaved down to $201 million from $391 million.
“We had another strong quarter, beating expectations both top and bottom line,” said John Riccitiello, Chief Executive Officer. “We credit our results to blockbusters like FIFA 11 and to innovative digital offerings like The Sims 3 Ambitions and Madden NFL 11 on the iPad.”
“EA reaffirms its FY11 non-GAAP guidance,” said Eric Brown, Chief Financial Officer. “EA is the world’s #1 publisher calendar year-to-date and our portfolio is focused on high-growth platforms -- high definition consoles, PC and mobile.”
FIFA 11 was a big driver for EA, as the title sold in (shipped) 8 million units. It was the #1 title in Europe in the second quarter, and life to date, the FIFA franchise has now sold over 100 million units worldwide. EA also noted that it was the #1 PC publisher with 27% segment share at retail calendar year-to-date with "strong growth in digital downloads of full-game software."
Medal of Honor has seen its sales rise to 2 million units now as well. Earlier today, the company admitted that the game didn't meet its quality standards.
Along with the fiscal announcement, EA revealed its new "cost reduction plan," which involves restructuring "key licensing and developer agreements to improve the long-term profitability of its packaged goods portfolio." It's not clear which licenses or developers will be affected by this. EA said the move will lead to a "one-time GAAP restructuring charge of up to approximately $180 million in the second half of fiscal year 2011" and that "benefits of the restructuring are expected starting in fiscal 2012 and beyond."
2 Comments
November 2, 2010
Ah, EA CFO says MoH has sold 4MM units to date. The 2MM number above is just the first 2 weeks. If this is the case then why did they have to re-set the current Q so badly? FIFA 11 is doing very well, Madden doing decent, NFS Pursuit looking promising, why so timid with Q4?
November 2, 2010
I think what unclear here is whether that 4mm unit comment for sales to date is sell-in or sell-thru. With Black Ops less than a week frok release, if they have sell-in of 4mm on 2mm unit sell-thru then that paints a rather uninspiring reserve requirement on that inventory sitting in the channel with a major competitor release approaching. Retailers are in a position for price adjustments from EA if this is true.