Earnings: Electronic Arts Cuts Workforce 6 Percent As Losses Widen
This story was written by David Kaplan.
Video gamer Electronic Arts said it will lay off 6 percent of it staff, in a move that the company says will save $50 million in annual pre-tax earnings. GameDaily says that EA employs over 9,000, meaning that roughly 540 staffers will get the boot.
-- Net loss expands: As for the Q3 numbers, EA's net loss widened to $310 million from last year's $195 million net loss. Diluted loss per share was $0.97 as compared with diluted loss per share of $0.62 in Q307. As for the non-GAAP net loss, that number was was $20 million, an improvement over Q307's $87 million loss. Non-GAAP diluted loss per share was $0.06 as compared with non-GAAP diluted earnings per share of $0.27 for the prior year. In after-hours trading, was down 15 percent to $27.73.
-- Revs show healthy growth: Revenues during the quarter were jumped 39.7 percent to $894 million from $640 million year-over-year. Non-GAAP net revs came in 20 percent higher, with $1.126 billion versus Q307's $936 million, driven by Madden NFL 09, Spore, Mercenaries 2: World in Flames, as well as the continued strength of Rock Band. Still, the company is expecting the wider economic downturn to dent its sales strength going into the crucial holiday season. More after the jump.
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-- Outlook reduced: In a statement, EA CEO John Riccitiello said: "Considering the slow down at retail we've seen in October, we are cautious in the short term." While the gamer had no change in its non-GAAP net revenue forecastit's expected to be between $5 billion and $5.3 billion, or up 24 to 32 percent over the prior yearBarron's Eric Savitz points out EA has slashed its non-GAAP EPS estimate. The company now expects EPS of $1 to $1.40, down from $1.30 to $1.70 previously. Analysts' consensus had been calling for $1.42 EPS.
By David Kaplan