EA’s View of Itself: On Track and Ahead of Schedule

Acquisitions and corporate reorganizations can be expensive and time consuming. Electronic Arts (ERTS), which has worked through both in the past year, demonstrated just how much Tuesday with the release of Q4 and year-end earnings.

Partly due to onetime charges, the game publisher recorded a quarterly loss of $94m. The good news, on an adjusted basis, they earned $30m (9 cents a share), up from $19m last year. The results were also more than good enough to surpass analyst consensus expectations.

By the Numbers:

• Fiscal year revenue was $3.67b, up 19 percent year over year. On a non-GAAP basis, revenue was $4.02b, up 30 percent.

• Net loss for the year was $454m, vs. income of $76 million last year.

• Q4 net revenue was $1.13b, up 84% over $613m last year.

• Geographically, for 2008, EA claimed the title of top publisher by market-share with 19% of N. America and 20% of Europe. Asia turned in single digits. On the Wii, EA had 15% of Europe and 11% of N. America.

• In titles, 15 titles sold more than 2 million copies on the year. 27 more than 1 million. In Q4, Army of Two sold more than 1.8m copies. Burnout Paradise sold 1.5m. Rock Band sold 1.5m and FiFA Street 3 moved 800k copies.

• By platforms, console games represented about 47% of net income. As a percent of net revenue, the PS3 was the best earner. It grew from 7% in Q3 to 14%. Xbox 360 dropped to 11% from 13% and the Wii dropped to 7% from 9%.

EA CEO John Riccitiello characterized the years efforts favorably both in the conference call and in press statements. “A year ago, we committed to an aggressive change agenda,” he said “our employees stepped up to the challenge.” In EA’s view the company is on track and ahead of schedule.

Looking ahead to fiscal 2009, the company is forecasting revenue of between $4.9 and $5.15 . Adjusted earnings are expected to be in the range of $1.30 to $1.70 a share.