EA Strong Q1 Results + Announce CryTek Agreement News

Following on from Activisionâ??s strong first-quarter, EA today announced healthy first-quarter financial results.

Net Revenue for the first quarter rose by 22% compared to the same period last year, an increase from $353 million to $432 million, driven by sales of Harry Potter and the Prisoner of Azakaban, EA Sports Fight Night 2004 and UEFA Euro 2004, each of which passed one million sales in the quarter. Need for Speed: Underground continues to perform strongly for EA, with recent sales putting it past the 7 million mark since itâ??s release last Christmas.

The success of UEFA Euro 2004 led to a 49% increase in Net Revenue for Europe rising to $190 million; whilst increases were seen across the globe â?“ North America $211 million (+6%); Asia Pacific $18 million (+22%); Japan $13 million (+6%).

Net Income for the period rose to $24 million, marking a 32% increase compared to the same period a year ago, leading to diluted earning per share rising to $0.08 as compared with $0.06 for the prior year.

"We are off to a great start in our new fiscal year," said Larry Probst, Chairman and Chief Executive Officer. "We received five Game Critics Awards for Best of E3 -- a record for any company and three of our first quarter releases went platinum. NCAA Football's week one sales are tracking over 50 percent ahead of last year, and Madden NFL's pre-orders are at record levels. We continue to extend our lead by creating great entertainment while building for the next generation of technology."

"EA delivered on both the top and bottom lines while making significant investments in next generation technology," said Warren Jenson, Chief Financial and Administrative Officer. "Even with a 43 percent increase in research and development expense, we were able to increase our net income by over 30 percent in the quarter."

The strong report led to EA forecasting similar increases for the second quarter ending September 30 2004.

Net Revenue is expected to rise by 28-35% compared to last year totalling between $680 million and $715 million; whilst diluted earnings per share are expected to be between $0.28 and $0.34 â?“ up 12 to 36% year-on-year.

For the entire Fiscal Year ending March 31 2005, EA expects Net Revenue to total between $3.3 billion and $3.4 billion â?“ up 12 to 15% year-on-year, resulting in diluted earnings per share to stand between $2.00 and $2.10, compared to $1.87 for fiscal 2004.

Finally EA announced an agreement with CryTek, the developers behind the impressive PC shooter FarCry and the forthcoming console port FarCry: Instincts, to develop and publish a new game â??franchiseâ??.

Sadly details are scarce however the combination of EA and CryTek creates quite an enthralling proposition; the high production values and marketing expertise of EA coupled with the technical proficiency of the German developer, should result in a game worth keeping an eye out for.

"Bringing original intellectual property to the interactive entertainment market is a key focus for EA," said Frank Sagnier, vice president, EA Partners Europe. "EAP's partnership agreement with Crytek is a testament to our commitment to nurturing creative development and we are delighted to be working with one of the brightest talents in Europe to create what we believe will be an innovative gaming experience."

Cevat Yerli, president of Crytek said, "We are looking forward to this partnership with EA. Our advanced technology and creativity, together with EA's production support, marketing and sales, means that we have a great opportunity to bring an original gaming experience to our consumers, as well as grow our business. We are thrilled to see this development get underway".

Weâ??ll have more information soon.