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Electronic Arts Inc. (ERTS) Message Board

  • chiefpeeinpool chiefpeeinpool Jul 22, 2002 9:40 PM Flag


    Entertainment Software

    Heath Terry

    June Sales Report

    * For the month of June new console sales grew by 53% sequentially
    (14% year over year), following price cuts late in the month of May.
    In the same period, video game sales grew by 52% sequentially (27%
    year over year). For the month of June, Electronic Arts's Medal of
    Honor: Frontline for the PS2 took the overall top spot with over
    651,000 units sold through. Take-Two's Grand Theft Auto III for the
    PS2 remained at #2.

    * Sony sold 694,000 PS2 units in June, up from 524,000 in May.
    Microsoft sold 265,000 Xbox hardware units, up from 229,000 in May.
    Nintendo sold 213,000 Gamecube units, up from 111,000 units in May.
    Overall, console sales rose from 1.8 million units in June `01 to 2.0
    million this period. GBA sold 553,000 units, up significantly from
    310,000 in May.

    * Electronic Arts' (ERTS, $56.57, Strong Buy, TP $75) U.S. overall
    sales in the quarter were up 40% versus last year, with non-PC sales
    up 62%. The company reports earnings on Thursday, July 25th after the
    close. The dial in number is 719-867-0640, with access code 487228.
    We estimate $280m in revenue and an EPS loss, excluding non-cash
    charges, of $0.06. With the success of Medal of Honor in the U.S. and
    FIFA worldwide, we believe the company could exceed our expectations
    by as much as $0.05.

    * Activision's (ATVI, $25.60, Buy, TP $37) U.S. sales grew 92% year
    over year in the quarter on the back of Spiderman: The Movie, which
    sold through over 1.3 million units across 5 platforms. The company
    reports earnings on Tuesday, July 23rd after the close. The dial in
    number is 800-969-1059. We estimate revenue of $170 million and EPS
    of $0.19. THQ's (THQI, $21.40, Buy, TP $45) U.S. sales increased 23%
    year over year in the quarter, with a sharp increase in June (59%
    year over year) due to the release of 60% of the company's products
    in the last five weeks of the quarter.

    * In the second month of Take-Two's (TTWO, $19.40, Buy, TP $34)
    quarter, sales were up approximately 261% on the continued strength
    of its mature rated products. Midway's (MWY, $9.15, Hold, TP $10)
    U.S. sales are up 15% with Gauntlet for the GCN its best performing
    game, with over 42,000 units sold.

    * Clearly, June was a strong month for the industry, driven by a full
    month of lower hardware prices and a few major product releases.
    Given this strength and our outlook for a strong holiday period, we
    would recommend that investors use the opportunity to add to
    positions in companies like Electronic Arts, THQ, and Activision at
    these seasonally weakened levels.

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    • > First off, all this blather about 'soft sales' is fine if it's your opinion, but how about some facts to back it up?

      Jamok, interestingly, the initial message s/he replied to already answered this, here's the quote:

      U.S. overall sales in the quarter were up 40% versus last year, with non-PC sales
      up 62%.

      So, the only real question is why you/Spec even both responding! ;)

    • Thomas,

      First off, all this blather about 'soft sales' is fine if it's your opinion, but how about some facts to back it up? How about some hard data that show software sales declining rather than rising by hearty rates year-over-year, as reported by and earlier poster with a source for the information.I'm sorry, but it just seems like you're spreading FUD until you substantiate your claims. Also, I often find that people who can't spell aren't the brightest crayons in the box - 'debuckles'? for debacles? ("De Buckles are coming off my pants - I tink dey going to fall down?) 'their' for there? I'm a little hesitant to take advice seriously from the kid who failed spelling. Also, while we can all be wrong with predictions (I'm certainly guilty on that score), I hope you'll stick around to explain yourself if your dire warning that 'ERTS will most likely trade below $40in the next 2-weeks..and remain their (sic) through the next 6 months!' turns out to be way off the mark.


    • a trip to the movies with the wife little johnny, his sister, two cousins, and two friends:


      ice cream after the movie:


      gas to drive everyone home:


      trip to the car wash to clean the damage the little bastards did to daddy's new 5 series:


      substituting all that for a fun filled day of hot dogs and hamburgers, PS2, Gamecube, or Xbox... PRICELESS

    • >i'm pretty sure people will chalk up $50 for little johnny this year.

      Yeah, we can pontificate all we want on how VG sales will be down (because they are $50 for a mere non-necessity toy!) or how VG sales will be up (because people will buy VGs instead of trips to Disneyland or taking the kids to the movies) . . but we won't convince each other of anything. Let's look at the cold hard facts . . . and the cold hard facts are given in the first message of this "csfb" thread that indicates every one of the videogame companies is selling more product now than last year!!

      >the games end up paying for themselves.
      if you
      >have kids you know what i am talking about.

      Well, I don't have kids so I would appreciate it if you elaborate on what exactly you mean by that? Are they cheap baby sitters? Are they more cost effective than a trip to the ball game complete with hot dogs?

    • >Well...I have to get to bed now...but I will end this discussion with these thoughts!
      >ERTS will most likely trade below $40 within the next
      >2-weeks... and remain their through the next 6-months!

      I'm not going to argue with that but I don't think we are really much smarter than 1929; like it or not, parents do buy lots of $50 videogames (at least they are interactive as opposed to passive television viewing); and do we even have savings bonds these days? ;-)

      I wouldn't even know where to buy one. I can buy Japanese stocks traded as ADRs on the NYSE but I have no clue as to where to buy a savings bond. I guess I could figure it out. I just remember getting one as child and being really pissed off when I learned that the $200 savings bond wasn't worth $200!!! . . . the early origins of the skeptical investor. ;-)

    • retail stores begin stocking merchandise for xmas as early as august. people may be scared of the market but they don't control its direction, institutions do. regardless of how bad things get entertainment will always survive anf flourish. i'm pretty sure people will chalk up $50 for little johnny this year. the games end up paying for themselves. if you have kids you know what i am talking about.

    • Do not be surprized if ERTS does not meet its numbers on thursday! Also, be prepared for a very poor forward looking guidance and softer sales looking forward...people are cutting back on discretionary spending...and that includes toys and games and may very well adjust future earnings down!!

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