NEW YORK - Video game publisher Electronic Arts (NASDAQ:ERTS) says its third-quarter loss widened because of a slew of charges and weak holiday sales which the CEO called "a clear disappointment."
The Redwood City, Calif.-based company, which has locations in Canada, also unveiled more cuts, saying it would now lay off a total of 1,100 jobs, or about 11 per cent of the workforce, and close 12 facilities.
For the three months that ended Dec. 31, Electronic Arts lost US$641 million, or $2 per share. In the same period a year earlier it lost $33 million, or 10 cents per share.
Excluding charges, EA says it would have earned 56 cents per share.
Revenue jumped 10 per cent to $1.65 billion. Counting deferred revenue from online games, the total was $1.74 billion.
Analysts had expected a profit of 88 cents per share on sales of $1.9 billion, according to Thomson Reuters.
"Our holiday quarter came in below our expectations and we have significantly reduced our financial outlook for fiscal 2009, a clear disappointment," CEO John Riccitiello said in a statement.
As a part of an overall cost reduction program, EA said it is narrowing its product portfolio and cutting "other variable costs."
It expects to incur total restructuring charges, including severance and facility closures, of $65 to $75 million, which it said will be recorded over the next twelve months.
"Given our recent performance and the current economic environment, we are aligning our cost structure with a lower projection of revenue, resulting in approximately $500 million of operating expense reductions in fiscal 2010 as compared with our previous plans," said chief financial officer Eric Brown.
Last month, EA said it was cutting 10 per cent of its workforce, or about 1,000 jobs, which at the time was a four per cent increase from a previous announcement made in October.
EA also said in December it would close its Vancouver-based Black Box Studio and move the operations to nearby Burnaby. That closure was one of the 12 identified on Tuesday, a Canadian spokesperson said.
The company has about 2,500 employees in Canada, about 1,700 of which are in Vancouver's Lower Mainland, and the rest in Edmonton and Montreal.
The Black Box studio is known for the popular driving game "Need For Speed."
The extra cuts come after EA cancelled plans to expand into a new video game development studio in Vancouver late last year.
