What was the revenue performance in the third quarter of fiscal year 2006?

For the three months ended December 31, 2005, Electronic Arts Inc. reported net revenue of $1.27 billion, which represents an 11% decrease compared to $1.428 billion for the same period in the prior year. This decline was attributed to various factors including lower sales from certain franchises and the natural progression of console lifecycles.

How did profitability change year-over-year for the quarter?

Net income for the third quarter ended December 31, 2005, was $259 million, a decrease from $375 million reported in the corresponding quarter of the previous year. Diluted earnings per share also decreased to $0.83 from $1.18 year-over-year.

What is the company's cash flow situation?

Electronic Arts generated $259 million in cash from operating activities for the nine months ended December 31, 2005, a notable increase from $160 million generated in the same period of the prior year. The company ended the period with $1.462 billion in cash and cash equivalents and $1.094 billion in short-term investments.

What is the company's outlook regarding the transition to next-generation consoles?

The company is actively managing a transition period in the industry towards next-generation consoles. This transition is expected to lead to increased development costs and potentially volatile operating results in the near term, as sales of current-generation games may decline while investments in new platforms increase.

Are there any significant strategic acquisitions planned?

Yes, in December 2005, Electronic Arts entered into a definitive agreement to acquire JAMDAT Mobile Inc., a publisher of wireless games, for approximately $680 million. This acquisition is expected to close in the fourth quarter of fiscal year 2006 and is aimed at strengthening EA's position in the mobile gaming market.

EA 10-Q Quarterly Report Q3 FY2006 — Revenue, Net Income, EPS

Summary

Electronic Arts Inc. (EA) reported net revenue of $1.27 billion for the third quarter ending December 31, 2005, a decrease of 11% compared to the same period last year. Net income for the quarter was $259 million, down from $375 million in the prior year's quarter. The company generated $259 million in cash from operating activities for the nine months ended December 31, 2005, an improvement from $160 million in the same period last year. The company is navigating a transition to next-generation consoles, which is expected to increase development costs and potentially impact near-term revenue and profitability. EA is also seeing significant growth in its mobile platform revenue. Despite a slight decrease in revenue and net income compared to the prior year's quarter, the company's operating cash flow shows improvement, and strategic initiatives like the planned acquisition of JAMDAT Mobile Inc. signal a focus on future growth in the mobile gaming space.

Key Highlights

1Net revenue for the third quarter decreased by 11% year-over-year to $1.27 billion.
2Net income for the third quarter decreased to $259 million from $375 million in the prior year.
3Operating cash flow for the nine months ended December 31, 2005, significantly increased to $259 million from $160 million in the prior year.
4Mobile platform revenue saw substantial growth, increasing to $192 million for the quarter and $305 million for the nine months.
5The company is actively managing a transition to next-generation consoles, which is expected to increase costs.
6EA announced its intention to acquire JAMDAT Mobile Inc. for approximately $680 million.

ELECTRONIC ARTS INC. Quarterly Report for Q3 Ended Dec 31, 2005

Summary

Key Highlights

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