On Tuesday night, Electronic Arts
Non-GAAP net revenue, in which you subtract the amortizing effects of long-term subscription revenue and other deferred sales, plummeted by 34% year over year to $609 million. Last year's $0.09 of non-GAAP earnings per share vanished into $0.37 per share of pro forma losses. EA is doing more package deals and subscription-based online multiplayer games than ever, which can cause weird financial behaviors like this.
Of course, EA reports these figures every quarter, and it wouldn't do at all if they were left out in just one gnarly period. It would be like Google
Still, GAAP numbers beating their pro forma peers across the board is unusual enough to catch my eye. Despite an all-out assault from Activision Blizzard
Now EA settles in for a traditionally slow summer, so don't expect any great results out of this sector for a while. In spite of that, the company's recent cost-cutting moves should ensure that the forecast for summer shouldn't be as cloudy. As this quarter's results have shown, EA's taken precautions to ensure that slimmed-down sales don't weight down the bottom line as much during leaner times.
Just keep an eye on the news feed for weak or impressive new product announcements. Say, Rock Band: The Beatles, anyone? And don't forget that EA owns some of the strongest game franchises ever seen: Sims, Madden NFL, Spore, and many more. It takes an Activision or Nintendo (OTC BB: NTDOY.PK) to even come close to that broad and powerful brand portfolio.
All things considered, I think EA will look good this coming fall -- with or without making another grab for Take-Two Interactive
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Google and Take-Two Interactive Software are Motley Fool Rule Breakers picks. Activision Blizzard, Electronic Arts, and Nintendo are Motley Fool Stock Advisor picks. Try any of our Foolish newsletter services free for 30 days.
Fool contributor Anders Bylund owns shares in Take-Two and Google, and he trusts management in both of those companies. He holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.