Summary
Electronic Arts Inc. (EA) reported its financial results for the fiscal quarter and six months ended September 29, 2010. For the three-month period, net revenue decreased by 20% to $631 million compared to the prior year, primarily due to the absence of major franchise releases like Rock Band and The Sims, though this was partially offset by strong performance from Battlefield and FIFA World Cup. The company reported a net loss of $201 million for the quarter, an improvement from the $391 million net loss in the same period last year. This improvement was driven by a significant decrease in cost of goods sold, lower R&D expenses, and a gain from the sale of its Ubisoft investment. For the six-month period, net revenue saw a slight increase of 1% to $1,446 million, with net loss also improving. Management highlighted trends such as the increasing importance of wireless platforms and digital content distribution, while noting challenges like the growing used games market and concentration of sales on hit titles. The company also reported a planned restructuring with expected charges of up to $180 million in the second half of fiscal year 2011.
Financial Highlights
42 data pointsKey Highlights
- 1Net revenue for the three months ended September 29, 2010, decreased 20% to $631 million year-over-year, largely due to fewer major franchise releases compared to the prior year.
- 2Net loss for the quarter improved significantly to $201 million, down from $391 million in the same period last year, benefiting from reduced cost of goods sold and gains on strategic investments.
- 3The company sold its investment in Ubisoft for approximately $121 million, realizing a gain of $28 million, which contributed positively to the quarter's financial results.
- 4For the six months ended September 29, 2010, net revenue increased slightly by 1% to $1,446 million, demonstrating resilience despite revenue shifts.
- 5International sales continued to be a significant contributor, accounting for approximately 46% of total net revenue in the six-month period.
- 6EA announced a plan to restructure licensing and development agreements, expecting to incur restructuring charges of up to $180 million in the latter half of fiscal year 2011.
- 7The company's cash and cash equivalents decreased to $1,056 million from $1,273 million at the beginning of the fiscal year, with cash used in operating activities totaling $282 million for the six-month period.