Electronic Arts Lowers Its Guidance -- Again (ERTS, TTWO)

Electronic Arts (ERTS)

If Electronic Arts (NASDAQ:ERTS) lowers its full year guidance just one more time, then it will be a 'charm'.  ERTS has once again lowered its future revenue expectations, the 2nd time in two months and its also dragging down Take-Two Interactive (NASDAQ:TTWO) shares.

Electronic Arts (ERTS) expects to report a loss of $1.94 to $2.24 per share, which is far greater than the earlier-estimated loss of $1.20 to $2.05 per share. Revenue is now expected to total $3.6 billion to $3.68 billion, a narrower range than the previously forecast $3.6 billion to $3.9 billion. Taking one-time charges out of the equation, Electronic Arts expects earnings of 40 to 55 cents per share compared to its earlier forecast for 30 cents to a dollar per share.

Furthermore, Electronic Arts estimated a third-quarter loss of 24 cents to 32 cents per share on revenue of $1.23 billion to $1.25 billion.

As a result of this news, Wedbush Morgan lowered ERTS's target price to $23 from $27 and Kaufman Bros. cut its target price to $20 from $23.

Shares of ERTS are down 8% today and trading at $16.80.  Take-Two (TTWO) shares are down 4% and now at $10.23 a share




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