Electronic Arts quarterly profits dip but surpass Wall Street’s expectations

Electronic Arts Inc., the video game maker, outcasts Wall Street’s expectations as the sales of its games used on the new PlayStation 3 mounts. The company reported quarterly net income dropped 38 percent to $160 million, or 50 cents per share, compared with $259 million, or 83 cents per share, during the same period last year. A fall had been expected because of the limited availability of the latest Sony and Nintendo consoles. Revenue for the quarter rose less than 1 percent, to $1.28 billion from $1.27 billion a year ago. Executives blamed much of the decline on a $28 million charge resulting from a major accounting change in stock-based compensation. Not including that charge and other one-time expenses, EA earned $201 million, or 63 cents per share. But the company is hopeful for the coming session as the chief financial officer, Warren Jenson, disclose that the company will profiting from distributing it’s subscriptions to online game sites, in-game advertising and micro-transactions from online players and company will take in around $115 million, up from about $75 million a year earlier. Mr. Jenson added that revenue for the current quarter would be in the range of $550 million to $600 million. Excluding special expenses are expected to be 3 cents a share. The company expects net revenue for fiscal 2007 to total $3.025 billion to $3.075 billion, better than the bottom-line estimate of $2.95 billion that the company had previously forecast and earnings, excluding special expenses, to be 70 cents to 74 cents per share, up from previous estimates of 55 cents to 70 cents per share. Last quarter, EA sold $400 million in titles for the older PlayStation 2, and $41 million in titles for the PlayStation 3. It sold $29 million in titles for Nintendo Co.’s. EA also sold $172 million in titles for Microsoft Corp.’s Xbox 360 last quarter. Shares of Electronic Arts rose 54 cents, to $50.54.