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Electronics Arts on Sale!

The news from Electronic Arts bordered on dismal for the company's third fiscal quarter, but the outlook is downright depressing for those investors long in these shares.

Sure, EA beat the Street by two cents, reporting 33 cent a share versus the 31 expected. But keep in mind, as late as a few weeks ago, the Street anticipated earnings around 56 cents. Revenue was essentially in line at $1.35 billion.

The problem for EA comes from guidance, both for its fourth and first fiscal quarters.

EA now expects EPS of 2 to 6 cents in the current quarter, far lower than the 13 cents analysts expected. That news will come on revenue of between $800 and $850 million. The Street was north of $851 million.

It gets worse.

EA offered guidance for its first fiscal quarter of 2011: a loss of 35 to 40 cents a share versus a Reuters consensus of a 4-cent loss. Revenue will be between $460 million and $500 million, or more than $250 million below consensus. But that's because EA will be instituting an accounting change on how it deals with deferred net revenue (packaged goods and digital content.)

Still, put that $250 million back in, the company still comes in below the $762 million Street consensus for Q1, 2011.

Meantime, with the gaming industry still suffering, this is a clear case of the bigger they are, the harder they fall. EA is very big. And today's after-market action is a big fall indeed. You gotta wonder if this is the catalyst that brings forth a suitor. Disney? Microsoft? Bueller?

Questions? Comments? TechCheck@cnbc.com