Game Maker Electronic Arts Swings to Loss

Stuck in an industrywide waiting game and faced with a high tax bill, video game publisher Electronic Arts Inc. swung to a loss in its fiscal fourth quarter and issued an outlook well below Wall Street expectations Wednesday.

The world’s largest video game publisher said it lost $16 million, or 5 cents a share, for the three months ended March 31. In the year-earlier period, the company posted a profit of $8 million, or 2 cents a share.

Revenue climbed to $641 million, up 16% from $553 million a year earlier.

Excluding certain items, the Redwood City, Calif.-based company said it would have earned $43 million, or 14 cents a share, compared with $30 million, or 9 cents, a year earlier. EA said the one-time charges included a repatriation tax of $375 million in foreign earnings and $59 million in acquisition costs.

On that basis, the company exceeded the expectations of 9 cents a share on revenue of $581 million from analysts polled by Thomson Financial.

For the full year, EA said it earned $236 million on revenue of $2.95 billion, compared with earnings of $504 million on revenue of $3.13 billion in the previous year.

For the current quarter ending in June, EA said it expected a loss of 28 cents to 22 cents a share on revenue of $300 million to $340 million, taking into account an estimated 9 cents a share in stock option expenses, 3 cents in amortization and 2 cents in restructuring charges. Analysts were expecting a loss of 19 cents on revenue of $412 million.

And for the current fiscal year, EA projected earnings excluding stock-based compensation and one-time charges to be 35 cents to 65 cents a share on revenue of $2.7 billion to $2.95 billion. That’s well below analysts’ earnings estimate of $1.07 a share on revenue of $3.12 billion.

Sales of video games industrywide have slowed as customers have been withholding purchases and waiting to switch to next-generation models of game consoles. In 2005, stalled purchases caused video game sales to fall 5% to $7 billion in the United States, according to market research firm NPD Group.

Shares of EA fell 4 cents to $54.50 in regular trading, then tumbled $2.65, or almost 5%, after issuing its report.