Cowen - EA's "missed the current hardware cycle"

EA has "missed the current hardware cycle" and won't record historical profits "anytime soon", according to a new report by analysts at Cowen Research.

"We believe that following serial earnings disappointments, Electronic Arts now deserves a lower valuation premium than the company has historically enjoyed," said the note.

"Since management first laid out its initial full year 2010 guidance and full year 2011 long-term guidance in February 2008, the company has failed to deliver on its earnings targets and has been forced to repeatedly revise down its guidance. Given this historical record, we do not think investors should place too much faith in management's current guidance."

Although Cowen Research's expectations for 2010 are only a little below that of EA's, it has significantly lowered its 2011 estimates, from a year-on-year earnings per share increase of 48.7 per cent to just 24.0 per cent.

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