EA Posts $16 Million Loss, Looks to Next-Gen Games

kukyfrope writes "Electronic Arts recently released its preliminary financial results for the fourth quarter and fiscal year ended March 31, 2006. While net revenue was up 16 percent to $641 million for the fourth quarter, the leading video game publisher suffered a net loss of $16 million. During the same period last year EA posted net income of $8 million. 'We are well into the console transition and now have more than 30 next generation games in development,' said Warren Jenson, Chief Financial and Administrative Officer."

Re:Profit. Loss. So what?

[hambonewilkins]

I agree. And even worse is attention focused on earnings per share (EPS). Both factors the company can completely tweak at will, in a way. Revenue and growth in revenue is far, far more important.

For example, lets say halfway through the quarter EA realizes its R&D costs are way too high and that their profits will be lower because of it. If investors are all jazzed about profit/loss, they could fire their work force or stop R&D in order to show a profit.

It's a relatively meaningless number unless, as was stated, it is a long trend of losses or it was completely unexpected (and without a decent explanation).