Top video game publisher Electronic Arts lowered its profit forecast Thursday as it delayed Mercenaries 2 and a new Battlefield title, sending its shares down 6 percent.
Electronic Arts also expects to ship its highly anticipated game Spore before the holidays, later than the April-June time frame expected by many in the industry.
EA said it expected fiscal fourth-quarter results to range from a loss of 3 cents per share to a profit of 2 cents per share, excluding special items--well below the 17 cents that was the average analyst forecast on Reuters Estimates.
It also changed its projected full-year profit range to between 93 cents and 98 cents from 85 cents to $1.15.
Despite delaying Battlefield: Bad Company and Mercenaries 2 to fiscal 2009, which begins April 1, EA kept its quarterly revenue estimates in line with Wall Street targets due to strong sales of hit musical game Rock Band.
EA distributes Rock Band for Viacom's MTV Games. While it books all sales from that game, which costs at least $170, less of that falls to its own bottom line compared with titles EA publishes itself.
"We are shipping out high-margin properties to next year and getting more on the top line from Rock Band," EA Chief Financial Officer Warren Jenson told Reuters.
That did not explain all of the shortfall in the company's outlook, according to Wedbush Morgan analyst Michael Pachter, who said EA's expenses were likely higher than expected.
"They have historically made money at the $600 million revenue level. For them to break even on $800 million has people spooked," Pachter said, referring to EA's fourth-quarter revenue forecast.
EA shares fell as much as 6 percent to $44.50 in extended Nasdaq trading. Based on Thursday's close, the stock has fallen more than 6 percent over the past year, compared with a rise of more than 50 percent for chief rival Activision.
EA posted a 44 percent rise in adjusted profit for its third quarter, but said it lost three points of market share in North America and Europe due to a lack of must-have titles.
"We are not satisfied where we are. We had no internally developed breakaway titles," Chief Executive John Riccitiello told analysts on a conference call.
One potential breakaway game is Spore, in which players nurture microbes into a galaxy-spanning civilization. The game is made by Will Wright, the legendary game designer behind hits such as The Sims.
Asked when Spore would be released, Riccitiello said: "It's going to be before the holidays," an apparent delay from an earlier guidance that pointed to a spring debut.
EA said last May it
For its fiscal third quarter, Electronic Arts said profit excluding special items was $290 million, or 90 cents per share, compared with $201 million, or 63 cents per share, a year earlier, and one penny higher than the average Wall Street estimate.
Third-quarter net revenue was $1.5 billion, up 17 percent from a year ago, boosted by sales of titles such as Need for Speed: Pro Street and FIFA 08.
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