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EA second-quarter adjusted sales fall short of estimates

Nov 5 (Reuters) - Electronic Arts Inc on Thursday reported quarterly adjusted sales below Wall Street estimates, as big-budget publishers compete to tap the lockdown-led surge in videogame sales. EA as well as rivals Activision Blizzard Inc and Take-Two Interactive Software Inc have benefited from a surge in videogame sales in the United States, as people staying indoors due to COVID-19 have turned to videogames for entertainment.

The company’s adjusted revenue for the second quarter ended Sept. 30 dropped 30.7% to $910 million, missing analysts’ average estimate of $971.3 million, according to IBES data from Refinitiv.

“If there’s anything you know, it’s clearly there’s a return to a little more normal than what we saw in Q1 because Q1 was off the charts,” Chief Financial Officer Blake Jorgenson told Reuters.

The company expects holiday-quarter adjusted sales to be at $2.35 billion, compared with estimates of $2.33 billion, betting on robust demand for its sports titles “Madden NFL 21” and “FIFA 21”.

EA’s football title “Madden NFL 21”, which was released in August, became the third highest selling game in September, according to data from research firm NPD.

Earlier in the day, the company extended its multi-year partnerships with mixed martial arts promoter Ultimate Fighting Championship and the National Hockey League (NHL). It’s sports division thrives on licensing deals with sports leagues that allow exclusive use of the brand, its players and stadiums, for the company’s games.

EA also said its board had approved a new two-year program to repurchase up to $2.6 billion of its common stock and declared a cash dividend of 17 cents per share.

Reporting by Ayanti Bera in Bengaluru; Editing by Vinay Dwivedi