EA Loses $205m in the December 2011 Quarter - News
by VGChartz Staff , posted on 01 February 2012 / 6,406 Views
EA's financial results for the three months to December 2011 have just arrived. On revenues of $1.061b on a GAAP basis, the company lost $205m in the December 2011 quarter. For the 12 months to December 2011, EA revenue came to $3.865b (up nearly $400m from 2010), with a loss of $173m on a GAAP basis (down from a $397m loss). On a non-GAAP basis, which calculates totals with fewer expenses, EA profited $334m on revenue of $1.651b for the quarter. Yearly profit on the non-GAAP basis came to $311m on $4.204b in revenue.
Compared to last year, revenue in Q4 grew by only $8m, but losses decreased from $322m in Q4 2010 to $205m in Q4 2011.
Non-GAAP revenue for the quarter was forecast at $1.55b - $1.65b, so EA just beat its forecast, as did the non-GAAP profit results which came in about 5% above the high end of expectations. In light of the new data, EA expects revenue for the March 2012 quarter to reach $1.425b - $1.475b on a GAAP basis, with a profit of $1.45-$1.59 per share. That is actually a huge profit forecast on a GAAP basis - roughly $500m ($485m-$520m roughly) - but it is because on a GAAP basis EA has delayed the results of some of its Battlefield money to the next quarter (hence the major revenue difference between GAAP / non-GAAP income above - $590m different). On a non-GAAP basis, EA expects profit to reach only $34m-$68m for the March 2012 quarter since Battlefield has already been included in the data.
EA noted the following highlights for its quarter:
- Madden has sold through nearly 5m units. Battlefield and Fifa topped 10m in sell through. Star Wars: The Old Republic sold through 2m units and has 1.7m subscribers.
- EA was the top publisher in Europe with 20% share in 2011, up from 17% in 2010. US share grew to 17% in North America during 2011 from 16% in 2010.
- Origin revenue topped $100m in revenue since launch.
- EA digital revenue grew to $377m in Q4 2011 from $211m in Q4 2010.
- Digital revenue reached over $1b in 2011, more than a quarter of total revenue in 2011.
EA also provided a detailed look at its revenue contribution by location and platform. In Q4 2011, revenue was split in favor of Europe - $505m, followed closely by North America - $500m, and then Asia in a distant third - $56m. North American revenue declined $30m from Q4 2010, while European revenue fell only $2m. Asian revenue grew $8m from Q4 to Q4.
- EA revenue grew to $331m from $285m on X360 in Q4 2010 to Q4 2011, from $282m to $314m for PS3, from $155m to $214m on PC, and from $59m to $70m on Mobile platforms.
- EA revenue on Wii fell to $49m from $130m, PS2 revenue fell from $20m to $7m, PSP fell from $22m to $14m, DS fell from $49m to $15m, and 'Other' fell from $51m to $47m.
Notably, EA still isn't even listing 3DS revenue - which suggests it is either included with DS and DS declined even faster than suggested, or the 3DS revenue figure is still under $1m for EA.
Look for tons of more earnings reports this week - Sony, Capcom, Konami, THQ, Take Two, Sega-Sammy, and Square-Enix should all be out by the end of the week.
Contact VGChartz at jmazel@vgchartz.com
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Pretty amazing that they have 1.7m subs for swtor considering 2m bought the game when it released. I imagine that will have some sort of impact on wow's subs when they are released.
For those who don't understand financial reports:
A business's Income statement does not tell you how much money a business actually earned. It's a paper statement and is purely for accounting purposes. It is not the true financial health of a company.
Look at their Cash Flow statement. It's a better understanding of how much cash they are bringing in or spending. i.e. Their Dec. quarter 2011 GAAP income report shows a loss of $205 million yet their Cash Flow statement shows they actually had a $1.242 Billion cash increase.
Basically, the income statement accounts for depreciation (equipment is usually bought and then the expense is account for over a period of years so the company is not actually spending that money each quarter), liabilities (money yet to be collected. EA is owed money so they have to deduct that in their income statement but it gets added back in the Cash Flow statement because they didn't spend that money), inventory, etc.
All the things that have to be accounted for in a strictly Accounting method get adjusted on the Cash Flow Statement to reflect the actual health of a business.
Kind of long, I know, but thought it may be useful when Publishers release their numbers.
Origin revenue topped 100 million. if all of those games were sold in the US, that would be 2 million games sold. If all of them were sold in Australia, it'd be under a million games sold. Taking Europe into account, it's probably about 1.6-1.7 million games sold in 8 months, which is approximately 200k games per month. I doubt they'll continue it much longer tbh.
EA has got to be one of the worst managed companies in the world. No one can consistently sell as much as they do while simultaneously losing so much money. Fire the CEO.
EA lost more money? Get ready for another 300 million dollar purchase of some Facebook gamedev and the "necessary" layoff of hundreds of works to compensate.
but how... I just don't get how they can lose money despite having so many games that are so profitable.
They keep losing money yet stay in business... wtf?
Next time, try releasing some games for the Wii and handhelds. It doesn't take much; your mobile sales prove you can make smaller scale games for things like WiiWare and the eShop.
Pretty good quarter by EA.
Not going to comment much on the dozens post about EA loosing money because I'm tired to have to explain about GAAP and non GAAP. I just would like to point one thing and the Source knows it but failed to mention it again.
The main difference between EA GAAP and non GAAP are the 506 million$ of defered revenue, not that fact that GAAP computes fewer expenses( that's why cash flow was nicely positive too).... If you're going to report company financials, GET IT RIGHT.
I suck at Economics, I don't comprehend how a company can shift so much Software yet still post a loss like that.
So they make a profit but get to book it as a loss under GAAP. That seems fair on the ordinary wage and salary taxpayer. They must have awesomely shady accountants.
Actually there's not much impact on taxes, the profits just got moved to next quarters due to deferred revenue...
Why does EA keep on loosing money? Theyre not based on japan like sony.
Every year they lose money and make a prediction that they'll start making money next year - it's ridiculous. Maybe they should stop buying a new company every quarter.
"from $59m to $70m on Mobile platforms"
Holy shit!!! Nintendo better be worried.
Well deserved,i used to hate EA quite alot due to DRM and what they did to the C&C series. Also Activision is the big evil company to hate now. suck this EA
