Electronic Arts Tumbles
Yesterday, Electronic Arts Posted 4Q Loss of $16M. Shares tumbled 10.92% today, closing at $48.55.
Revenue actually climbed 16%, but the loss was attributed to one-time charge for taxes and acquistion costs. So this price drop comes a bit unwarranted.
Taking a look at the games industry; sales of video games industrywide have slowed as customers have been withholding purchases and waiting to switch to next-generation models of game consoles.
Specifically, customers are holding out for Sony Corp.’s PlayStation 3 and Nintendo Co.’s Revolution consoles, both due later this fall.
The outlook for Electronic Arts still looks good to me, with no debt and strong game titles, they should do well once again with the transition of new consoles.