Games company shares unaffected by accounting changes
Electronic Arts beats Wall Street's expectations to show a rise in its share price despite a net loss in its results
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.
Further reading:
Electronic
Arts Posts 2Q Net Loss
Electronic
Arts 2Q adjusted earnings beat estimate, 3Q outlook below consensus