Electronic Arts CEO Resigns Ahead of Expected Weak Results

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Electronic Arts (NASDAQ: EA ) CEO John Riccitiello resigned from his post on Monday after the market close, taking responsibility for the company's decline. The company also provided a downbeat outlook for the current quarter.

Over the last five years, the stock has lost around 60 percent and EA has not been able to recover from losses incurred in late 2008. The company's current Chairman Larry Probst, who previously worked at EA as an executive, will take over Riccitiello's position until a permanent replacement can be found.

In a letter to employees, Riccitiello said that he was taking responsibility for "shortcomings" in the company's financial results this year. "It currently looks like we will come in at the low end of, or slightly below, the financial guidance we issued to the Street, and we have fallen short of the internal operating plan we set one year ago," he said in the letter. "For that, I am 100% accountable."

In late trading on Monday, EA shares were up better than 2 percent to $19.18 in the wake of the news.

Mr. Riccitiello had been the company's CEO since 2007. Under the executive, the company has attempted to transition from focusing on disc-based games for consoles such as the PlayStation and XBOX to developing games for PCs, social networks and mobile devices. For years, the company was able to boost its stock price with the success of title such as the Madden NFL football franchise and other popular sports titles.

Under Riccitiello, EA invested heavily to try to re-position the company. The game publisher purchased PlayFish Ltd. for $275 million and spent $1.3 billion on PopCap Games. Mr. Probst was the CEO of Electronic Arts prior to Mr. Riccitiello's hiring in 2007 and also worked for the company in various roles since 1984.

In a statement, he said that Mr. Riccitiello's tenure at EA was marked by "bold decisions, a big vision for online games, a passion for product quality and an enduring respect for the people who work here."

Electronic Arts also provided updated guidance for the current quarter. The company said that results will likely be at the low end or slightly below its January forecast calling for earnings per share in a range of $0.57 to $0.72 and revenue of $1.03 billion to $1.13 billion.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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This article appears in: Investing , US Markets

Referenced Stocks: EA

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