Analyst: Timing of Jenson's Departure from EA 'Unnerving'

Following the news that Electronic Arts' Chief Financial Officer Warren Jenson is leaving the company, UBS analyst Ben Schachter commented in a note to investors that the news "does not come as a complete surprise" but the timing of it is questionable.

"We believe Mr. Jenson's departure was a mutual decision, and while it's not surprising that CEO John Riccitiello would want to reshuffle his team, the timing may raise eyebrows given lag since other key mgmt changes, the pending offer for TTWO, and coming right before the end of the fiscal year," said Schachter. "We note that the co. indicated that the change is not related to financial controls (we take them at their word)."

Regarding EA's continued attempt at a hostile buyout of Take-Two, Schachter said the CFO change will likely have little impact: "Difficult to see read-throughs from today's news on ERTS's ongoing attempt to acquire TTWO but we envision little impact to the co's strategy on the deal going forward. We think CEO John Riccitiello is the driving force behind this deal, though the timing here is unnerving and will likely raise questions with investors."

He continued, "While Mr. Jenson's replacement will likely not be a 'game-changer' longer-term, the news underlines our cautious stance on the stock. Had the replacement been a smooth, well-telegraphed transition, the Street may have viewed it more positively. However, we think the unexpected timing will raise eyebrows and the co's risk profile."

Schachter believes the new CFO has already been selected and will be announced soon. UBS is maintaining a "Neutral" rating on EA's stock, with a 12-month target of $52.