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Electronic Arts Profit Tops Street, But Stock Down On Weak Outlook

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Electronic Arts Inc. (EA) on Thursday reported an adjusted profit for the third quarter that topped Wall Street estimates, however, the video game publisher's revenue fell short of expectations. The company lifted its full year outlook again, but detailed a weak guidance for the fourth quarter. Shares of the company slipped 7 percent in the after-hours trading.

Redwood City, California-based Electronic Arts reported second-quarter loss of $45 million or $0.14 per share, compared to a profit of $142 million or $0.44 per share last year.

Excluding one-time items, adjusted earnings for the quarter rose to $1.83 per share from $1.22 per share last year. On average, 20 analysts polled by Thomson Reuters estimated earnings of $1.81 per share for the quarter. Analysts' estimates typically exclude special items.

Electronic Arts' revenues for the third quarter dropped to $1.07 billion from $1.13 billion a year ago. Adjusted revenues rose to $1.80 billion from $1.43 billion last year. Twenty analysts had a consensus revenue estimate of $1.81 billion for the quarter.

Chief Financial Officer Blake Jorgensen said, "Our results were driven by strong performances from STAR WARS Battlefront, Need for Speed, Ultimate Team and catalog titles."

Star Wars Battlefront surpassed EA's fiscal year guidance of 13 million units sold-in.

EA said it is the #1 publisher on PlayStation4 and Xbox One consoles in the Western World for calendar year 2015. Madden NFL 16 was the #1 sports title in the U.S. and FIFA 16 was the #1 title across all genres in Europe for calendar year 2015.

Looking forward, EA now expects adjusted earnings of about $3.04 per share and adjusted revenues of $4.52 billion for 2016. Analysts currently estimate earnings of $3.10 per share and revenues of $4.56 billion.

Earlier, the company expected adjusted earnings of about $3.00 per share and adjusted revenues of $4.50 billion.

For the fourth-quarter, the company expects adjusted earnings of about $0.40 per share on revenues of $875 million. Analysts currently estimates earnings of $0.50 per share on revenues of $915.41 million.

EA closed Thursday's trading at $69.79, up $0.30 or 0.43%, on the NYSE. The stock, however, dropped $4.79 or 6.94% in the after-hours trade.

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