Are EA Earnings Enough For Investors?

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Published: July 30, 2015 4:32 pm

Last Updated: April 27, 2020 4:31 pm

Electronic Arts Inc. (NASDAQ: EA) released its fiscal first-quarter earnings report after the markets closed on Thursday. The video game designer had $0.15 in earnings per share (EPS) on $693 million in revenue versus Thomson Reuters consensus estimates of $0.03 in EPS on $652.04 million in revenue. The same quarter from the previous year had $0.19 in EPS on $775.00 million in revenue.

The company gave guidance for the fiscal second quarter and the 2016 fiscal year. For the second quarter EA expects to have $0.40 in EPS and $1.075 billion in revenue compared to consensus estimates of $0.67 in EPS on $1.12 billion in revenue. For the 2016 fiscal full year, the company expects to have $2.85 in EPS on $4.45 billion in revenue versus consensus estimates calling for $2.87 in EPS on $4.48 billion in revenue.

Here are a few stats from the first quarter report:

Trailers, gameplay and live streams of EA’s games were viewed over 53 million times throughout the week of E3.
Players in Battlefield 4 and Battlefield Hardline logged more than 170 million online gameplay hours combined.
Monthly active users for EA’s mobile titles averaged more than 150 million.
More than 16 million matches of FIFA 15 were played on average per day.

At the end of the fiscal first quarter, the company had cash and cash equivalents of $1.81 billion compared to $2.07 billion at the end of fiscal 2015. During this quarter EA repurchased 2.2 million shares for a total of $132 million.

Andrew Wilson, CEO of EA, said:

Q1 was a great start to fiscal year 2016 for Electronic Arts as we continue our journey to put our players first and deliver amazing entertainment experiences. We have players engaging for longer periods in our live services, ongoing strength across our digital business and growing anticipation for our upcoming titles.

CFO Blake Jorgensen commented on earnings as well:

EA delivered first quarter revenue, margins and EPS above guidance through strength in catalog sales and outperformance in digital live services offerings. We are raising our full-year guidance today to reflect the momentum across our portfolio.

Shares of EA closed Thursday relatively flat at $72.31 on its 52-week trading range of $31.77 to $75.10. Following the release of the earnings report, shares were down 1% at $71.63. The stock has a consensus analyst price target of $73.29.

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