Pacific Crest analyst takes dim view on EA

Pacific Crest Securities analyst Evan Wilson said Wednesday that he thinks Electronic Arts Inc. could fall short of its guidance due to weak video game sales.

THE OPINION: EA has had its "worst stretch of execution ever" in Wilson's opinion, even worse than another tough period from 2005 to 2008. He said holiday season sales of its "Medal of Honor" game were disappointing, and high-profile games released this year have received poor reviews.

THE BACKGROUND: Some investors are optimistic about EA's potential because new consoles are expected to boost game sales. Shares hit a 52-week high on Tuesday, and have gained nearly 10 percent over the past 12 months.

THE ANALYSIS: Wilson, however, doubts EA will be able to capitalize on new game players, as he's been disappointed by the quality of recent games. He cut his sales estimates for the games released this year: "Dead Space 3," ''Crysis 3" and "SimCity."

Wilson also trimmed his earnings estimate for this fiscal year by 5 cents, to 85 cents per share. EA has forecast profit of 86 cents to $1 per share, excluding one-time items, for the year ending in March.

Wilson also cut his 2014 fiscal year estimate by 5 cents, to 95 cents per share.

That's below predictions of analysts polled by FactSet, who were expecting the company to earn 95 cents per share for the company's 2013 fiscal year and $1.14 for 2014.

Sales of video game consoles, games and accessories have suffered as some consumers shift to games played on smartphones and tablets or through Facebook. Research firm NPD Group said game sales fell 22 percent to $13.3 billion in 2012.

But Electronic Arts' problems go beyond that, Wilson said. "This has nothing to do with a difficult market," the analyst wrote in a research note. "EA has shot itself in the foot again."

A representative for EA was not immediately available to comment.

THE STOCK: Shares slipped 31 cents, or 1.6 percent, to close at $18.94 Wednesday.