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Ahead of the Bell: Electronic Arts

January 29, 2014

NEW YORK (AP) Electronic Arts rose 3 percent in premarket trading Wednesday despite weak holiday sales during the third quarter and a disappointing outlook. Most analysts that follow the video game maker remained optimistic as the gaming sector shifts toward new consoles released by Sony and Microsoft recently. Electronic Arts posted a wider loss for its fiscal third quarter late Tuesday, but its adjusted profit more than doubled to top analyst predictions. Revenue fell 12 percent. The Redwood City, Calif. , company makes the "Madden NFL 25" and "Battlefield 4" video games. Sales of new titles were strong, thanks to a boost from the Xbox One and PlayStation 4 consoles, which were released in late November. But sales of games for older consoles declined more than expected. For the current quarter, which runs through March, the company predicted a per-share profit a penny lower than analysts expected and its revenue estimate also fell short. Sterne Agee analyst Arvind Bhatia backed his "Buy" rating for the stock noting that the company's third-quarter profit managed to beat expectations despite revenue losses stemming from the shift toward new gaming consoles. Drew Crum of Stifel Nicolaus also stuck by his "Buy" rating saying the quarterly results were a sign of better things down the road, including better-than-expected results related to games for the new consoles and improving profitability. Evan Wilson of Pacific Crest Securities , however, is more cautious. He thinks the console transition will have a bigger affect on the company's long-term results that most expect. In premarket trading, shares of Electronic Arts Inc. rose 63 cents to $25.50 .


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Source: Associated Press


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