‘Record’ Revenues, But Bigger Losses Mean EA Will Still Axe 1,500 Positions
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Ink on the Playfish deal is barely dry, but EA is already planning to lay off 1,500 staff. The cuts come across divisions; Gamasutra reports tips coming in from EA Redwood Shores, Tiburon, Black Box and Mythic studios.
SEE ALSO: Earnings: EA Posts Smaller Net Loss Than Analysts Anticipated
Whether the glass is half-empty or half-full depends on whether you go by EA’s GAAP or non-GAAP numbers. The company swung to a loss of $1.21 per share for its fiscal Q2—or $391 million—vs. a 97-cent per share, $310 million loss for the same quarter last year. Excluding charges and deferred game sales, the company said it would have earned $19 million, or 6-cents per share, for the quarter. The non-GAAP EPS would have been slightly below the Street’s forecast for 7-cents per share.
| 3Q 2009 | 3Q 2008 | |
|---|---|---|
| EPS | -$0.97 | -$1.21 |
| Net Income | -$310M | -$391M |
| Revenue | $894M | $788M |
In a statement, CFO Eric Brown said the company delivered a “record quarter” in terms of revenue, but again, that depends on which numbers you use. Revenue excluding charges and deferred online game payments came in at $1.14 billion, up two percent year-over-year; the company said The Beatles: Rock Band, Need for Speed: Shift and its sports franchises: FIFA, Madden and NCAA Football drove the sales. GAAP revs were actually down by about 12 percent to $788 million.
But revenues aren’t profits—and the company’s goal for the past few quarters has been to get back in the black—so that means more cost-cutting. Back in February, EA said it would close 12 studios and lay off 1,100 staff. The company has upped the number to 1,500, and says it expects to complete the layoffs by March 2010. The plan is to save at least $100 million, with restructuring charges expected to be at least $130 million.
Posted In: Entertainment, Games, Money, Earnings, electronic arts
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