Electronic Arts, the world’s biggest video game publisher, warned on Tuesday that flagging holiday sales would hit profits in the second half.
“Holiday sales are not meeting expectations,” said Larry Probst, Chairman and Chief Executive Officer. “For the December quarter, it is likely the industry will be down double digits on a percentage basis.”
EA said profits in the 2006 fiscal year would be “well below” its initial guidance. Most analysts had been expecting earnings of $1.41 a share in 2006, down from $1.71 a share last year.
The profit warning was the latest in a string of bad news from video game publishers. Activision, a rival, last week warned that sales and profits for the quarter ending in December would miss estimates. The company blamed the trend on weak US and European sales.
EA’s announcement on Tuesday echoed its warning earlier this month that sales of video games in the cruicial early-December shopping period were weaker than expected.
Shares in EA rose 1.6 per cent to $53.11 ahead of the announcement, which came after the closing bell on Tuesday. The shares moved slightly higher in after-hours trading.