EA Issues Profit Warning
In a conference call to analysts yesterday, Electronic Arts Chief Financial Officer (CFO) Warren Jenson revealed that the company was significantly lowering both its revenue and profit forecasts for the current fiscal quarter. The news immediately sent the company’s stock downward by nearly $2 per share.
The EA executives participating in the conference call cited several contributing factors to these revised estimates including:
– an overall weak market for current generation game titles
– the limiting of the installed user base for the Xbox 360 due to the console’s supply issues
– rumors of the PlayStation 3 may be launching in Spring 2006, noting that it’s “causing some people to stay on the sidelines”
– no price drop for the Playstation 2
Overall the outlook is not so bright for the last month of 2005. Hopefully the year 2006 will bring EA’s stocks upward $2.00 instead of downward…but only time can tell.