Electronic Arts Earnings - EA Profit Beats Street, Announces Job Cuts - Companies * US * News * Story

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CNBC ON DIGG

EA Profit Beats Street, Announces Job Cuts

Published: Monday, 9 Nov 2009 | 4:18 PM ET

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By: CNBC.com with Wires

Electronic Arts posted earnings on Monday that declined compared with last year, but profit topped analysts' forecasts. The company also announced layoffs of 1,500 positions in another round of restructuring and shares rose in extended trading.
Madden 2010
Source: EA

Excluding one-time items, the video game company earned 6 cents in its fiscal second quarter on sales of $1.15 billion, compared with a loss of 6 cents a share on sales of $1.13 billion in the same period last year.

Analysts who follow EA, the publisher of "Madden" football and "Need for Speed," expected the company to turn in a gain of 7 cents a share on sales of $1.13 billion, according to a consensus from Thomson Reuters.

EA shares [ERTS Loading... () ] rose almost 2 percent in extended trading Monday. Click here to get after-hour quotes for Electronic Arts. They closed at $19.53.

$275 Million Acquisition

Meanwhile, EA acquired privately held Playfish on Monday for $275 million in cash plus other consideration as the maker of the 'Madden NFL' series expands in the growing social gaming sector.

EA paid about $275 million in cash for 2-year-old Playfish, which makes games for people to play on computers with friends, unlike traditional video games that need dedicated consoles.

The deal includes another $25 million in equity retention arrangements, and the sellers could reap another $100 million, contingent upon the achievement of certain performance milestones through 2011, London-based Playfish said.

EA said the acquisition accelerated its position in social entertainment and strengthened its focus on the transition to digital and social gaming.

The video game industry has had a tough time for much of this year after capping 2008 with record sales. The recession has forced customers to cut back on spending, and the lack of big hit titles relative to last year has made year-over-year comparisons difficult.