EA slices 1,100 jobs
EmptyShares of Electronic Arts fell in after-hours trading Tuesday after the video game giant said it is eliminating 1,100 jobs, or 11% of its staff, after holiday-season results came in well below expectations.
The company reported a widened fiscal third-quarter loss, including charges, and significantly reduced its guidance for the full fiscal year.
EA cut its fiscal-year 2009 revenue estimate to $4.2 billion-$4.35 billion, from $4.9 billion-$5.15 billion, because of weaker-than-expected sales; its decision to release certain titles, including "The Sims 3" and "The Godfather 2," in fiscal 2010 rather than in fiscal 2009; and the strengthening U.S. dollar.
The company also now expects a fiscal-year loss of $3.29 per share to $3.56, wider than previously feared.
For the quarter ending Dec. 31, EA recorded a loss of $641 million, including a $368 million impairment charge related to its wireless business and a $244 million charge related to deferred tax assets. In the year-ago period, it had reported a loss of $33 million.
Sales rose $151 million to $1.65 billion, driven by such game titles as "Madden NFL 09," "FIFA 09" and "Rock Band 2."
EA said it will close 12 facilities and narrow its product portfolio. It expects to incur restructuring charges of $65 million-$75 million, to be recorded during the next year.
Before the earnings update, EA shares had closed up a bit after hitting a new 52-week low intraday.