Earnings Labs

Electronic Arts Inc. (EA)

Q2 2006 Earnings Call· Wed, Nov 16, 2005

$202.12

-0.20%

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1 Month

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Transcript

Operator

Operator

Good day, everyone, welcome to the Electronic Arts Second-Quarter Fiscal Year 2006 Earnings Conference Call. Today's call is being recorded. For opening remarks and introductions I would like to turn the call over to Miss Tricia Gugler, Director of Investor Relations. Please go ahead.

Tricia Gugler

Management

Good afternoon and welcome to our second-quarter fiscal 2006 earnings call. Today on call we have Larry Probst, Chairman and Chief Executive Officer, Warren Jenson, Chief Financial and Administrative Officer and Frank Gibeau, Executive Vice President and General Manager of North American Publishing. Before we begin I would like to remind you that you may find copies of our SEC filings, our earnings release, and a replay of our webcast on our web site at investor.ea.com. Shortly after the call, we will post a copy of Warren's remarks on our web site. Throughout the call, we will present both GAAP and non-GAAP financial results. Non-GAAP results exclude charges associated with restructuring, asset impairment, other temporary impairment of investment and affiliates, apart in process technology, amortization of intangibles, employee stock-based compensation, and certain non-recurring litigation expenses and their related tax effects. In addition, the Company's non-GAAP results exclude the impact of tax adjustments. A supplemental schedule to our earnings release provides the reconciliation of non-GAAP to GAAP measures. In addition, a supplemental schedule demonstrating how we calculate ROIC will be included on our web site. All non-GAAP measures are provided as a complement to our GAAP results and we encourage investors to consider all measures before making a decision. All comparisons made in the course of this call are against the same period of the prior year unless otherwise stated. We have included our trailing 12-month platform shares in our 2005 estimated market outlook in a supplemental schedule that will be posted on our web site. During the course of this call, we may make forward-looking statements regarding future events and the future financial performance of the company. We caution you that actual events and results may differ materially. We refer you to our most recent form 10-K and 10-Q for a discussion of risk factors that could cause our actual results to differ materially from those discussed today. We make these statements as of November 1, 2005 and disclaim any duty to update them. Now, I would like to turn the call over to Warren.

Warren Jenson

Chief Executive Officer

Thanks, Tricia. Good afternoon, everyone, and thanks for joining us. Our second-quarter results were solid, netting the ins and outs of title moves, particularly FIFA in Europe, we extended the top end of our revenue guidance and soundly came ahead on the bottom line. Sports, is off to a great start. Our North American segment share is a record 75%, up 7 points from this time last year. Of the top ten sports titles, we have nine on the PS2 and eight on the Xbox. Madden NFL '06 took only three weeks to become the number one console title for the year in North America. Through the end of the quarter, we sold an excess of 4 million copies. With 12 weeks of retail data, we estimate sell-through is up in the high-teens year-over-year. NCAA Football 2006 has sold over a million and a half copies, and we estimate sell-through is up over 15%. FIFA ‘06 launched very strongly. So far we estimate our sell-through is pacing more than 30% ahead of last year, FIFA was at the top of the charts in Europe for three consecutive weeks. The competition is heating up, but we are very pleased with our performance and like our prospects. NBA Live 2006, while only a week's worth of industry numbers are formally in, we estimate that we are outselling our nearest competitor by a factor of 5. NBA Live has now surpassed the billion-dollar lifetime sales mark becoming EA’s fifth billion-dollar franchise. Burnout Revenge sold more than 1.8 million copies and joins Battlefield 2 as the top ten rated title for the year. Year-to-date, our overall quality rating as measured by Metacritic leads all major third-party publishers, roughly 50% of our titles have been rated 80 or higher, double the industry average of 24%.…