Electronic Arts (NASDAQ: ERTS) did not have a good second quarter. According to preliminary results, the publisher is looking at an adjusted loss of 6 cents per diluted share; this compares unfavorably to a profit of 27 cents per diluted share in the year-ago period. Wait, did I just say unfavorably? I meant very unfavorably. EA merely met Wall Street's expectations.

Non-GAAP revenues, however, increased 20%, and cash flow from operations for the trailing twelve months rose over 50% (cash was used, however, for operations during the quarter). But shares were down in the after-hours session over 15% at one point. The market was reacting to the cautious outlook from management and comments about a slowing retail environment. Furthermore, EA needs to reduce its costs. The company is eliminating about 6% of its workforce. While Wall Street traditionally looks upon job cuts as a sign that management is taking steps to improve its operations, I think, in this case, shareholders will look upon the cuts as a sign that EA is floundering.

Can you imagine this? Shouldn't EA be doing an incredible job of maximizing shareholder value by taking its incredible pipeline of intellectual properties and monetizing it via the next-generation platforms provided by Sony (NYSE: SNE), Microsoft (NASDAQ: MSFT) and Nintendo (OTC: NTDOY)? It should, but it's not. The publisher has sold millions of copies of high-profile titles such as Madden NFL 09 and Spore, but again, those costs and expenses are getting out of hand.