EA financials down on deferred revenue adjustments

Electronic Arts has posted its Q1 financial results for the three months to the end of June this year, noting that both revenues were down year-on-year while losses increased.

Revenue was down 20 per cent from USD 804 million to USD 644 million, while losses were up from USD 95 million to USD 234 million.

However, according the company that's largely the result of large deferred revenue adjustments - the quarter saw a net deferral of USD 172 million relating to "online-enabled packaged goods games and digital content", while the same quarter the previous year saw a net benefit of USD 195 million.

The GAAP diluted loss per share was 72 cents, compared with 30 cents last year.

The quarter's sales were driven by strong performances in June of The Sims 3 and EA Sports Active, with the latter causing sales of the Wii console to double and handing the company the top publisher accolade in the US for that month.

"Good execution delivered better-than-expected financial results in the first quarter," said John Riccitiello, CEO. "We are very pleased with the success of both The Sims 3 and EA Sports Active."

And CFO Eric Brown added: "Our Q1 performance was driven by our previously announced cost-cutting initiatives and a strong frontline slate. We had a solid Q1 both top and bottom line and we are focused on delivering the balance of the year."

In terms of outlook, the company remains confident that the guidance issued at the beginning of the financial year remains accurate, with an expectation that net revenue will hit USD 3.7-3.85 billion by the end of March 2010, while the diluted loss per share has been adjusted to USD 0.85-1.35.