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Analyst: Delays Imminent At Electronic Arts?

Analyst: Delays Imminent At Electronic Arts?

May 20, 2008 | By Brandon Boyer

May 20, 2008 | By Brandon Boyer
More: Console/PC

In his latest note to investory, Janco analyst Mike Hickey had said that while he is "optimistic" on EA's fiscal 09 sales despite a predicted "extremely weak" Q1, EA's decision to not release quarterly guidance could signal big game delays in the near future.

On its last call with investors, EA CFO Eric Brown explained that it would henceforth only be releasing annual guidance as the games industry "is hit driven, seasonal and significantly impacted by the release dates for our titles," which he said "creates uneven quarterly comparisons, both sequentially and year-over-year."

Explicitly, Brown said that "if we delay a title for quality reasons from one quarter to another in the same fiscal year, while good for the long-term future of the franchise, it could have a significant impact on our quarterly performance without necessarily affecting our annual performance."

Hickey has taken this as "a sign post for upcoming title delays," more than simply precautionary or arbitrary procedure. Hickey did not provide any predictions on which titles might be delayed.

Finally, looking more broadly at the company, Hickey says that while "we are optimistic over the sales potential for [EA's] portfolio of expected game releases in their fiscal '09 period," Janco expects "extremely weak fiscal Q109 earnings" that will be "heavily weighted toward low margin products like Rock Band."

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