EA digital sales up, profits below guidance

EA digital sales up, profits below guidance
Seth Tipps

By Seth Tipps

May 8th 2013 at 9:05AM

2013 a mixed bag for publisher, shows annual earnings report

The fiscal year 2013 earnings report for EA shows the company is still down in terms of profits and revenue, but it remains hopeful of progress in digital and next generation console sales.

Revenues fell $4.14bn the year prior to $3.8bn and though profits were up to $98 million from $76 million, this was still below initial guidance for the year.

Even so, the message to investors was that a strong showing early in the next generation of consoles combined with continued digital growth would help ensure a solid future for the publisher.

Giving strength to this argument is the growth of Battlefied premium subscriptions to 3.5 million users, giving a revenue of $120 million in the fourth quarter, and continued growth for the Origin digital distribution platform which now has an install base of 47 million, with 20 million on mobile.

FIFA was another strong digital performer, with $350 million in sales across the franchise, $200 million of which came from FIFA 13.

Digital sales seem to be helping significantly with the company's cash reserves, with cash provided by operations growing from $277 to $324 million year-on-year.

The company is equally enthusiastic about its outlook for the next console cycle, having kept expenses flat in its outlook for FY 2014.

"EA has a solid operating plan with disciplined R&D spending and a sharp focus on delivering the best games and services," said chief financial officer Blake Jorgensen.

“We are holding our FY 2014 operating expenses flat to the prior year - a significant achievement in a console transition year.”

The company has a big line-up of 11 console titles for the next year, some of which won't be announced until after non-disclosure agreements with Sony and Microsoft have expired.

Flat operating expenses despite a big line-up of games for a new consoles is certainly a good thing, but this hasn't come without a cost however, as EA has made major cuts in the past few months to keep expenses in hand.