Hitman101
01-30-2003, 11:54 AM
OMG guys Microsoft better act QUICK with Vivendi cause EA may want a piece of them to. Darn you EA !!!!
January 30, 2003
Electronic Arts Posts 89% Earnings Increase
By MATT RICHTEL
http://www.nytimes.com/2003/01/30/b...nt&position=top
AN FRANCISCO, Jan. 29 — Buoyed by games like Lord of the Rings: The Two Towers and Madden N.F.L. 2003, Electronic Arts today reported earnings that far exceeded Wall Street's expectations, showing continued dominance in the video game industry.
Electronic Arts said that in its third quarter, which ended in December, 11 of its games sold more than a million copies each, a remarkable result in a business where any game that sells more than 750,000 copies is considered a major hit.
Electronic Arts posted revenue of $1.23 billion for the quarter, compared with the $1.13 billion average estimate of Wall Street analysts. The company reported net earnings of $250 million, an 89 percent increase over the year-earlier period. Earnings per share were $1.69, compared with analysts' estimate of $1.57.
But the positive news was tempered by the lower-than-expected performance of the Sims Online, an online cyberworld that Electronic Arts brought out last month. Industry analysts and Electronic Arts pinned big hopes on the game as a growth market and a bellwether of consumer acceptance of online game playing in general.
The game has attracted 82,000 registered players, who pay $9.95 a month, which is "behind where we thought we'd be," said Warren C. Jenson, the company's chief financial and administrative officer. He did not say what the company's expectations had been.
Suggesting that the company has growth plans beyond the Sims, Electronic Arts also announced today that it had filed with the Securities Exchange Commission for a universal shelf registration — a regulatory requirement when a company intends to take out a line of credit, and that is generally intended to pave the way for a company to borrow to make acquisitions. Electronic Arts said it intended to borrow $2 billion.
The sizable amount of the line of credit suggests that Electronic Arts may be seeking to buy a major competitor, like the game unit of Sega or Vivendi Universal Games, said Edward Williams, an analyst with Gerard Klauer Mattison.
Industry analysts have speculated that Electronic Arts is competing with Microsoft to acquire Vivendi's game unit. Jeff Brown, a spokesman for Electronic Arts, declined to comment on that speculation.
"I think they want a piece of Vivendi; I think they want Blizzard," said Mr. Williams, the analyst. Blizzard Entertainment is part of Vivendi Universal Games.
The company had a huge quarter, bolstered by holiday sales, said Shawn Milne, an analyst with the Soundview Technology Corporation. "They blew away the numbers."
The company's profit margins hit 55 percent, compared with 52 percent in the quarter last year.
The success is not a surprise in at least one respect. The video game industry is heavily cyclical, with growth when new video game platforms are released. The market is flush with new platforms, like the Sony PlayStation 2, the Nintendo GameCube and Microsoft's Xbox, paving the way for big sales.
Electronic Arts closed at $50.97 in regular trading before its earnings announcement, up 20 cents. It fell as low as $48.87 in after-hours trading.
January 30, 2003
Electronic Arts Posts 89% Earnings Increase
By MATT RICHTEL
http://www.nytimes.com/2003/01/30/b...nt&position=top
AN FRANCISCO, Jan. 29 — Buoyed by games like Lord of the Rings: The Two Towers and Madden N.F.L. 2003, Electronic Arts today reported earnings that far exceeded Wall Street's expectations, showing continued dominance in the video game industry.
Electronic Arts said that in its third quarter, which ended in December, 11 of its games sold more than a million copies each, a remarkable result in a business where any game that sells more than 750,000 copies is considered a major hit.
Electronic Arts posted revenue of $1.23 billion for the quarter, compared with the $1.13 billion average estimate of Wall Street analysts. The company reported net earnings of $250 million, an 89 percent increase over the year-earlier period. Earnings per share were $1.69, compared with analysts' estimate of $1.57.
But the positive news was tempered by the lower-than-expected performance of the Sims Online, an online cyberworld that Electronic Arts brought out last month. Industry analysts and Electronic Arts pinned big hopes on the game as a growth market and a bellwether of consumer acceptance of online game playing in general.
The game has attracted 82,000 registered players, who pay $9.95 a month, which is "behind where we thought we'd be," said Warren C. Jenson, the company's chief financial and administrative officer. He did not say what the company's expectations had been.
Suggesting that the company has growth plans beyond the Sims, Electronic Arts also announced today that it had filed with the Securities Exchange Commission for a universal shelf registration — a regulatory requirement when a company intends to take out a line of credit, and that is generally intended to pave the way for a company to borrow to make acquisitions. Electronic Arts said it intended to borrow $2 billion.
The sizable amount of the line of credit suggests that Electronic Arts may be seeking to buy a major competitor, like the game unit of Sega or Vivendi Universal Games, said Edward Williams, an analyst with Gerard Klauer Mattison.
Industry analysts have speculated that Electronic Arts is competing with Microsoft to acquire Vivendi's game unit. Jeff Brown, a spokesman for Electronic Arts, declined to comment on that speculation.
"I think they want a piece of Vivendi; I think they want Blizzard," said Mr. Williams, the analyst. Blizzard Entertainment is part of Vivendi Universal Games.
The company had a huge quarter, bolstered by holiday sales, said Shawn Milne, an analyst with the Soundview Technology Corporation. "They blew away the numbers."
The company's profit margins hit 55 percent, compared with 52 percent in the quarter last year.
The success is not a surprise in at least one respect. The video game industry is heavily cyclical, with growth when new video game platforms are released. The market is flush with new platforms, like the Sony PlayStation 2, the Nintendo GameCube and Microsoft's Xbox, paving the way for big sales.
Electronic Arts closed at $50.97 in regular trading before its earnings announcement, up 20 cents. It fell as low as $48.87 in after-hours trading.