EA share price rockets skyhigh

Shares of Electronic Arts soared more than $4, to $57.16, in after-hours trading after the world's biggest video game publisher beat Wall Street's earnings expectations with strong fiscal second-quarter sales. Record sales of "Madden NFL 07" as well as robust sales of EA's other popular sports titles, were key contributors to the strong quarter, company officials said. Good news

For the overall industry, EA said it now predicts sales growth to be from zero to 5 percent, compared with last year. EA had previously projected industry sales would remain flat or decline by as much as 5 percent.

"We are very much looking forward to the holidays," EA's Chief Financial Officer, Warren Jenson, said during a conference call to analysts. "It's the beginning of prime time for next-generation technology and entertainment."

Shares of EA soared more than US$4, to $57.16, in after-hours trading. They had ended the regular session on the Nasdaq Stock Market at $53, up 24 cents.

EA's second-quarter profit fell 57 percent but due largely to new stock-option accounting rules.

Net income for the three months ended Sept. 30 was $22 million, or 7 cents per share, compared with $51 million, or 16 cents per share during the same period last year, the company said. The results included stock-based compensation charges of $33 million.

On an adjusted basis, excluding certain items, EA said it would have earned $65 million, or 21 cents per share, compared with $46 million, or 15 cents per share, last year.

Fatter profits

Revenue rose 16 percent to $784 million from $675 million a year ago.

Analysts surveyed by Thomson Financial were expecting earnings of 2 cents per share on sales of $672.2 million.

Record sales of "Madden NFL 07" -- EA sold 5 million copies in the five weeks after the game's August launch -- as well as robust sales of EA's other popular sports titles, were key contributors to the strong quarter, company officials said.

For the past year, the video game software industry faced slower sales as consumers waited for new game console systems, which are now slated to go on sale later this month. But the second-quarter performance indicates that the video game market is still healthy, Jenson said in a phone interview.

"Revenue was strong and exceeded our expectations," Jenson said. "This was an exciting quarter and it's going to get that much more exciting with the consoles coming out."

Games sales still srong in the older machines

Sales for Sony's PS2 has remained strong, accounting for about 35% of EA's revenue . Sales for Xbox 360, accounts for 21% of EA's revenue

Annual revenue is now expected to be $2.95 billion to $3.13 billion, up from previous targets of $2.8 billion to $3 billion. Earnings are expected to be break-even to 15 cents per share, compared with a previous expectation of break-even to a loss of 30 cents per share.