Kaufman Bros. Analyst Says Electronic Arts (ERTS) Had Stunning Shortfall in Madden NFL '10 Sales

September 11, 2009 12:06 PM EDT

Kaufman Bros. maintains a 'Buy' rating on Electronic Arts (NASDAQ: ERTS), lowers price target from $26 to $23.

Kaufman analyst says, "EA's Madden NFL 10 sales fell year over year, which was well short of plan. Sales were expected to be weak. Management confirmed this yesterday with an internal memo to employees indicating the title was comping negative on a year-over-year basis. However, the magnitude of this shortfall implied by last night's NPD data was nothing short of stunning: among the SKU we have visibility of in the top-10 titles for the month, EA sold 1.7 million units versus 2.14 million a year ago, or roughly a $200 million miss assuming an average ASP of $48..."

"We are lowering our fiscal 2010 non-GAAP EPS estimate to $0.60 from $1.00, based on net revenue for the year of $3.97 billion, down from our prior estimate of $4.32 billion, and $4.09 billion a year ago...We now expect fiscal 2Q10 revenue of $1.02 billion and non-GAAP EPS losses of $0.20, from $1.15 billion and losses of $0.06, respectively. We look for fiscal 3Q10 revenue of $1.49 billion and non-GAAP EPS of $0.80, down from $1.66 billion and $1.02, respectively."

To see more analyst ratings on ERTS Click Here.

Electronic Arts Inc. develops, markets, publishes, and distributes video game software and content.

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