Electronic Arts first-quarter earnings rise 130%
Shares in Electronic Arts Inc., developer of game franchises such as Madden NFL and the Sims, rose after the company released its first-quarter earnings, laced with nuggets of unexpected good news.
EA, in a conference call with analysts Tuesday, said revenue grew 23% from a year earlier to $999 million in the three months that ended June 30. Net income of $221 million shot up 130% from $96 million a year earlier.
The results were higher than what analysts had expected, helping to boost EA shares by 35 cents, or 1.5%, to $24.16 in after-hours trading following the earnings release. The stock had earlier closed down 26 cents at $23.81.
The Redwood City, Calif., game publisher said it had received 10 times the number of advance orders for Battlefield 3, slated for release Oct. 25, compared with the franchise’s previous game, which sold more than 9 million copies. Advance orders for EA’s upcoming online game Star Wars: The Old Republic are “the largest ever” for the game publisher, said EA Chief Executive John Riccitiello.
EA has said it expects to release the Star Wars game near Christmas. The highly ambitious title is designed to take on Activision Blizzard Inc.’s World of Warcraft, whose 12 million subscribers make it one of the industry’s most profitable games.
EA’s FIFA11 soccer game, which has sold 15 million copies, is getting traction online via connected game consoles such as the Xbox 360, as well as on social networks such as Facebook. Although the vast majority of players on Facebook do not pay money to play FIFA, the small percentage who do end up spending an average of $56 for virtual items that can be used in the game.
And with the NFL labor battle over, the cloud has lifted for EA’s Madden NFL 12, which had been in limbo with the uncertain fate of football players.
“EA’s four biggest products all had positive developments,” said Evan Wilson, a Pacific Crest Securities analyst.
