Electronic Arts Inc. (NASDAQ: EA) reported its third-quarter earnings Tuesday after the close of trading. The video game designer had $1.22 in earnings per share (EPS) and $1.43 billion in revenue versus Thomson Reuters consensus estimates of $0.92 in EPS and $1.29 billion in revenue. The same period from the previous year had $1.26 in EPS and $1.57 billion in revenue.

The company gave guidance for its fiscal fourth quarter. Revenue is expected to be $830 million and EPS is expected to be $0.22. There are consensus estimates of $0.26 in EPS and $911.64 million in revenue for the fiscal fourth quarter. Electronic Arts raised fiscal 2015 net revenue guidance from $4.175 billion to $4.253 billion and diluted EPS guidance from $2.05 to $2.35 per share. There are consensus estimates of $2.05 in EPS and $4.20 billion in revenue.

What you will have noticed is that the video game giant crushed its expectations, but the guidance for the coming quarter seems low. With how much the stock was down ahead of earnings, the investment community wants to treat this report as an earnings beat with potentially sandbagged guidance. EA remains a turnaround story with more revenue growth expected by analysts next year over the current year. Also, the difference between net revenue on a GAAP and non-GAAP basis is high, with deferred net revenue (for online enabled games) being listed as $325 million that was not counted for the quarter ahead in the non-GAAP revenues which analysts use.

For the calendar year 2014 Electronic Arts was ranked as the #1 publisher on PlayStation and Xbox One consoles in the world. It was driven by the success of Dragon Age: Inquisition, FIFA 15, NHL15, Madden NFL 15, EA SPORTSTM UFC, TitanfallTM, Battlefield 4TM, and FIFA 14.

In the third quarter Electronic Arts repurchased 2.5 million shares for $97 million under its $750 million share repurchase program initiated in May 2014.

Looking forward, the raised guidance  is a big plus for this video game giant, and coupled with its performance over the past year as a top publisher would put Electronic Arts in an ideal position to attack 2015. That is how investors have voted so far.

Blake Jorgensen, CFO of Electronic Arts, said:

EA has driven another quarter of record-breaking financials. Our ongoing digital transformation, including live services like EA SPORTS Ultimate Team, coupled with ongoing cost discipline, enables us to deliver consistent cash flow and earnings growth.

Just a day ahead of earnings, the following analysts weighed in on Electronic Arts:

• Brean Capital had a Buy rating and set its price target at $54
• MKM Partners had a Neutral rating and raised its price target to $48 from $41
• Credit Suisse had an Outperform rating and raised its price target to $55 from $45

Shares of Electronic Arts closed Tuesday down 2% at $48.41, but the after-hours reaction was positive and shares were up 3.5% at $50.10. The stock has a consensus analyst price target of $48.61 and a 52-week trading range of $24.44 to $50.41. It has a market cap of $15 billion.

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