Electronic Arts beats Wall Street's expectations to show a rise in its share price despite a net loss in its results
Accountancy Age, 02 Nov 2007
Accounting changes caused Electronic Arts, the gaming company responsible for The Sims, to show a net loss during its second quarter results posted yesterday.
For the quarter, EA posted a net loss of $195m, or 62 cents per share, compared with a profit of $22m, or 7 cents per share, in the same period a year ago.
Despite this, the shares climbed 5% as the company promised a new product lineup in time for the holiday season.
EA's adjusted earnings - which did not include the change in revenue recognition and other items - were $87m, up from $65m a year earlier. According to a survey by Thompson Financial, this figure translates into EA beating Wall Street's expectations, AP reported.
EA's CFO, Warren Jenson, said the company had worked to change its lineup and will have seven titles for the Wii in time for the holidays, with more also planned for Nintendo handheld games.
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