Earnings: EA’s Losses Continue To Mount; More Layoffs; Sims 3 Pushed Back

imageHoliday sales weren’t enough to stop the losses at Electronic Arts, as the gaming giant posted a $641 million loss for Q4 (its fiscal Q3), or $2 per share — up from a $33 million, $0.10 per share loss the previous year. Analysts were expecting earnings of $0.88 per share, per MarketWatch.

Revenues meet analysts expectations: Net revenue came in at $1.65 billion — up 10 percent from $1.5 billion in Q407; beating the consensus that EA would only post flat to 5-percent growth for the quarter. Non-GAAP revenues were relatively flat though — up less than one percent to $1.74 billion, from $1.73 billion in Q407. Updates to long-standing franchises, including Madden and Need for Speed drove the bulk of the sales, as well as Rock Band 2, which launched in September. Still, CEO John Riccitello said that the holiday sales were “below expectations.”

Cost-cutting details: Details about the company’s mass layoffs had been trickling out, but today’s report added more clarity: 11 percent, or about 1,100 employees will be cut — up from the 6 percent estimate EA gave during Q3 earnings, and from the 10 percent it said in December; it expects to incur restructuring charges between $65-$75 million over the course of the year as a result. The company also upped the number of facilities it would be closing from 9 to 12.

Rocky quarter to come: EA lowered its outlook for the coming quarter and end of its fiscal year: it expects non-GAAP revenue to come in at $4.1 billion, with a $0.35 per share loss; that’s lower than the Street’s consensus of $4.66 billion revenue and $0.60 per share profit (via Tech Trader Daily). The company also pushed back the release of the latest installment of The Sims franchise — a cash cow — from late February, to June 2. Despite the revised forecast, EA’s stock still trended upward in after-hours trading.

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