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Electronic Arts posts first profitable quarter in three years

Sales rose 14% in the fourth quarter to allow the video game maker to record a $30-million profit, compared with a $42-million loss a year earlier.

May 11, 2010|By Alex Pham, Los Angeles Times

Electronic Arts ended a three-year string of losses by posting higher sales and a return to profitability in its fourth quarter, fueled by sales of Battlefield: Bad Company 2, Mass Effect and Dante's Inferno.

Sales shot up 14% to $979 million in the quarter ended March 31, shifting the game publisher to a $30 million profit compared with a $42-million loss a year earlier. It earned 9 cents a share, up form a per share loss of 13 cents last year.

Other game companies recently also have reported an uplift in their financial health after being hammered in 2009 as consumers sealed their wallets. THQ Inc. last week said its quarterly loss narrowed as sales grew 16%. Activision Blizzard Inc. on Thursday said its first-quarter profits doubled while sales soared 33%. With the addition of EA's results, analysts say the $45 billion game industry may be out of the woods.

"The game industry is starting to emerge from a dark period and is now showing good signs of life," said Michael Pachter, analyst with Wedbush Morgan Securities.

John Riccitiello, who vowed to cut costs and publish "fewer, bigger hits" when he became chief executive of the Redwood City, Calif., company, said EA delivered on that promise. Twenty titles scored 80 or more points out of a possible 100, according to Metacritic, a site that compiles video game reviews from multiple publications.

"EA has turned a corner," Riccitiello said in a conference call with analysts. "We are rebuilding EA's reputation with consumers."

alex.pham@latimes.com

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