Shares of Electronic Arts (NASDAQ: EA) surged 7% in pre-market trading on Wednesday after the video game company reported better than expected fourth-quarter revenue and issued a strong guidance for its current quarter and full year.
Electronic Arts attributed the solid guidance to higher demand for its recent video game Apex Legends. EA stock has climbed 18.8% since the year begun while the S&P 500 has added 17%.
EA Earnings & Outlook
Net income for the quarter ended March 31 fell to $209 million, or $0.69 per share from $607 million, or $1.95 per share a year earlier. Excluding one-time costs and gains, earnings came to $1.41 per share compared to earnings per share of $1.31 in fourth quarter of last year.
Revenue dropped to $1.24 billion from $1.58 billion in the same period a year ago. Analysts surveyed by Refinitiv were expecting adjusted earnings of $0.97 per share on revenue of $1.201 billion. Full year revenue fell to $4.95 billion from $5.15 billion reported in 2018. Net income for fiscal 2019 increased to $1.02 billion from $1.04 billion posted last year.
EA posted net bookings of $1.36 billion compared to $1.26 billion reported in the year-ago quarter and above analysts’ estimate of $1.2 billion. Net bookings is a non-GAAP financial measure that comprises of digital and in-store sales.
Electronic Arts hopes to report net income of $1.77 billion on bookings of $690 million for the first quarter. For fiscal 2020, the company expects to post net income of $2.6 billion on bookings of $5.1 billion.
Wall Street expects Electronic Arts to post first quarter net income of $69 million on bookings of $806 million. For fiscal 2020, analysts expect EA to earn net income of $1.09 billion on bookings of $5.17 billion.
Electronic Arts CEO Comments
Electronic Arts Chief Executive Andrew Wilson commented, “FY20 will be a year of continued growth for our industry, and we’re excited to bring more great entertainment to the expanding audience around the world.”
“Players are engaging with games in more ways than ever before. We’re committed to meeting them where they are with a broad portfolio of amazing new games and live services, choice of engagement models including free-to-play and subscriptions, and new opportunities to play, compete and watch,” added Wilson.
Electronic Arts Inc. Profile
EA is one of the world’s largest third-party video game publishers and has transitioned from a console-based video game publisher to the one of the largest publishers on consoles, PC, and mobile.
The firm owns number of large franchises, including Madden, FIFA, Battlefield, Mass Effect, Dragon’s Age, and Need for Speed. EA recently signed a 10-year contract with Disney that granted EA the exclusive rights to develop Star Wars games for core gamers across all platforms.