Summary
Electronic Arts Inc. (EA) reported its third-quarter fiscal year 2013 results for the period ending December 30, 2012. The company experienced a net revenue of $922 million, a decrease of 13% compared to the same period in the prior year. This decline was primarily attributed to lower sales from major franchises like Battlefield and The Sims, with fewer new title releases compared to the prior year's strong performance. Despite the revenue decrease, EA managed to reduce its net loss to $45 million from $205 million in the prior year's quarter, primarily due to a significant reduction in operating expenses and a gain from the sale of strategic investments. The company continues to emphasize its shift towards digital content and services, with growth in 'Service and Other' revenue, driven by titles like Star Wars: The Old Republic and FIFA Ultimate Team. While packaged goods revenue declined, the digital segment showed resilience. EA also continued its share repurchase program, demonstrating a commitment to returning capital to shareholders. Overall, the quarter reflects EA's ongoing transition in a dynamic gaming market, with challenges in traditional sales offset by progress in digital offerings.
Financial Highlights
48 data points| Revenue | $922.00M |
| Cost of Revenue | $429.00M |
| Gross Profit | $493.00M |
| Operating Expenses | $532.00M |
| Operating Income | -$39.00M |
| Interest Expense | $7.00M |
| Net Income | -$45.00M |
| EPS (Basic) | $-0.15 |
| EPS (Diluted) | $-0.15 |
| Shares Outstanding (Basic) | 304.00M |
Key Highlights
- 1Net revenue for the quarter was $922 million, a decrease of 13% year-over-year, impacted by fewer major title releases.
- 2Net loss improved significantly to $45 million from $205 million in the prior year's quarter, driven by reduced operating expenses.
- 3Service and Other revenue increased by 24% year-over-year, indicating a successful shift towards digital content and services.
- 4Digital revenue (Wireless, Internet-derived, and Advertising) increased by 8% year-over-year, highlighting the growing importance of online sales channels.
- 5The company continued its active stock repurchase program, buying back approximately 12.2 million shares for $157 million during the quarter.
- 6EA generated positive cash flow from operations of $91 million for the nine-month period, an improvement from $10 million used in the prior year.
- 7Acquisition-related contingent consideration decreased significantly, reflecting adjustments primarily related to the PopCap acquisition.