REDWOOD CITY, Calif., Nov 02, 2010 (BUSINESS WIRE) -- Electronic Arts Inc. (NASDAQ: ERTS) today announced preliminary financial results for its second fiscal quarter ended September 30, 2010.
"We had another strong quarter, beating expectations both top and bottom line," said John Riccitiello, Chief Executive Officer. "We credit our results to blockbusters like FIFA 11 and to innovative digital offerings like The Sims 3 Ambitions and Madden NFL 11 on the iPad."
"EA reaffirms its FY11 non-GAAP guidance," said Eric Brown, Chief Financial Officer. "EA is the world's #1 publisher calendar year-to-date and our portfolio is focused on high-growth platforms -- high definition consoles, PC and mobile."
Selected Quarterly Operating Highlights and Metrics:
Q2 FY11 Financial Highlights:
Non-GAAP net revenue of $884 million exceeded guidance of $775 million to $825 million. Non-GAAP EPS of $0.10 exceeded guidance of ($0.15) to ($0.10). As expected, non-GAAP net revenue in Q2 fiscal 11 was lower compared to Q2 fiscal 10 due to lower distribution revenues and a reduced title slate, which went from nine major titles in Q2 fiscal 10 to seven in Q2 fiscal 11. This was partially offset by digital revenue growth.
(in millions of $ except per share amounts)
|Net Digital Revenue||$||161||$||128|
|Net Publishing Packaged Goods and Other Revenue||441||425|
|Net Distribution Packaged Goods Revenue||29||235|
|GAAP Total Net Revenue||631||788|
|Non-GAAP Net Digital Revenue||$||166||$||138|
|Non-GAAP Net Publishing Packaged Goods and Other Revenue||689||774|
|Non-GAAP Net Distribution Packaged Goods Revenue||29||235|
|Non-GAAP Total Net Revenue||884||1,147|
|GAAP Net Loss||(201||)||(391||)|
|Non-GAAP Net Income||32||19|
|GAAP Diluted Loss Per Share||(0.61||)||(1.21||)|
|Non-GAAP Diluted Earnings Per Share||0.10||0.06|
|Cash Flow from Operations||(134||)||6|
Trailing Twelve Month (TTM) Financial Highlights:
(in millions of $ except per share data)
|GAAP Net Revenue||$||3,668||$||3,946|
|GAAP Net Loss||(157||)||(1,308||)|
|GAAP Diluted Loss Per Share||(0.48||)||(4.06||)|
|Non-GAAP Net Revenue||3,619||4,314|
|Non-GAAP Net Income||86||72|
|Non-GAAP Diluted Earnings Per Share||0.26||0.23|
|Cash Flow from Operations||192||105|
Q2 FY11 Digital Metrics:
|GAAP Net Mobile Revenue||$||49||$||51|
|Monthly Active Users (MAU) in Social Games||49||n/a|
|Core Registered Users||80||41|
Cost Reduction Plan
EA has announced a plan to restructure key licensing and developer agreements to improve the long-term profitability of its packaged goods portfolio, and expects to incur one-time GAAP restructuring charges of up to approximately $180 million in the second half of fiscal year 2011. Benefits of the restructuring are expected starting in fiscal 2012 and beyond.
Business Outlook as of November 2, 2010
The following forward-looking statements, as well as those made above, reflect expectations as of November 2, 2010. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors, including: product development delays; competition in the industry; the health of the economy in the U.S. and abroad and the related impact on discretionary consumer spending; changes in anticipated costs; expected savings and impact on EA's operations of the Company's cost reduction plan; consumer demand for console hardware and the ability of the console manufacturers to produce an adequate supply of consoles to meet that demand; changes in foreign exchange rates; the financial impact of potential future acquisitions by EA; the popular appeal of EA's products; EA's effective tax rate; and other factors detailed in this release and in EA's annual and quarterly SEC filings.
Third Quarter Fiscal Year 2011 Expectations - Ending December 31, 2010
Fourth Quarter Fiscal Year 2011 Expectations - Ending March 31, 2011
Fiscal Year 2011 Expectations - Ending March 31, 2011
EA is affirming its full year FY11 non-GAAP guidance for both net revenue and earnings per share.
Note: GAAP expectations for all periods set forth above do not reflect the financial impact of the cost reduction plan announced today.
Fiscal Year 2011 Key Titles by Label and Platform
|Green Day Rock Band(TM) (1)||Console|
|APB All Points Bulletin (1)||PC|
|Sports||2010 FIFA World Cup South Africa(TM)||Console||Handheld/Mobile|
|Tiger Woods PGA TOUR(R) Online||PC|
|Tiger Woods PGA TOUR(R) 11||Console|
|Games||Need for Speed(TM) World||PC|
|Sports||NCAA(R) Football 11||Console|
|Madden NFL 11||Console||Handheld/Mobile|
|FIFA Online 3|