EA Cuts Losses But Layoffs Loom
Electronic Arts on Tuesday reported impressive results in its fiscal second quarter but said another reorganization will result in more layoffs and that it won't earn as much in the current quarter as analysts had predicted.
Shares of EA rose 2.5% to $16.20 on Tuesday but lost those gains in after-hours trading.
EA's loss in the quarter was $201 million, an improvement over last year's $391 million. Revenue fell 20% to $631 million despite strong sales of the FIFA 11 video game.
EA also said Tuesday it struck a five-year deal with Facebook to use that entity's Facebook Credits as the exclusive payment method for EA games on Facebook, where 200 million people play games each month.
As for layoffs, executives said they'll be kept to a minimum. The company had 7,820 employees at the end of the quarter, down from 8,829 the year prior.
EA's biggest competitor, Activision Blizzard, reports earnings on Thursday. Analysts will be looking for clues on how Call of Duty: Black Ops might perform during the Christmas gift-giving season. That franchise's predecessor set industrywide sales records.