Summary
Electronic Arts Inc. (EA) reported a net loss of $82 million for the third quarter of fiscal year 2010, a significant improvement from the $641 million net loss in the same period last year. This improvement was largely driven by the absence of a substantial goodwill impairment charge recorded in the prior year and a decrease in income tax provision. However, total net revenue for the quarter declined 25% year-over-year to $1.243 billion, impacted by a $103 million increase in deferred revenue from online-enabled games and digital content sales. For the nine-month period, EA also saw a reduction in its net loss and a decrease in operating cash burn. The company is actively managing its cost structure, evidenced by a significant restructuring plan involving workforce reduction and facility consolidation. Despite revenue headwinds, EA is investing in online content and services, and mobile platforms, aiming to diversify its business and capture future growth opportunities. Investors should monitor the company's ability to navigate the challenging economic environment and the effectiveness of its strategic initiatives, particularly the shift towards digital content and services, as well as the ongoing restructuring efforts.
Financial Highlights
42 data points| Revenue | $1.24B |
| Cost of Revenue | $654.00M |
| Gross Profit | $589.00M |
| Operating Expenses | $696.00M |
| Operating Income | -$107.00M |
| Net Income | -$82.00M |
Key Highlights
- 1Reported a net loss of $82 million for the three months ended December 31, 2009, compared to a net loss of $641 million in the prior year period.
- 2Total net revenue decreased by 25% to $1.243 billion for the three months ended December 31, 2009, compared to $1.654 billion in the prior year period.
- 3Deferred net revenue for online-enabled packaged goods and digital content increased, impacting reported net revenue by $103 million in the quarter.
- 4Announced and began implementing a fiscal 2010 restructuring plan expected to reduce workforce by approximately 1,350 employees.
- 5Acquired Playfish Limited, a developer of free-to-play social games, for approximately $308 million in cash and equity.
- 6Cash used in operating activities for the nine months ended December 31, 2009, was $101 million, an improvement from $203 million in the prior year period.
- 7Acknowledged continued economic environment challenges impacting consumer spending and retailer inventory ordering.