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Electronic Arts Goes for New High Score With Earnings

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Electronic Arts Inc. (NASDAQ: EA) reported its fiscal fourth-quarter financial results Tuesday after the markets closed. The video game giant had $0.39 in earnings per share (EPS) on $896 million in revenue, compared to Thomson Reuters consensus estimates of $0.25 in EPS on $850.23 million in revenue. The fiscal fourth quarter from last year had $0.48 in EPS on $914.00 million in revenue.

It is worth noting that for this quarter both net revenue and EPS were previously issued guidance by EA.

The company gave guidance for the fiscal first quarter and the 2016 fiscal year. The first quarter is expected to have $0.00 in EPS on $640 million in revenue, compared to consensus estimates of $0.19 in EPS on $774.59 million in revenue. In terms of the full fiscal year, EA expects $2.75 in EPS on $4.4 billion in revenue, versus the consensus estimates of $2.64 in EPS on $4.48 billion in revenue.

For fiscal year 2015, EA had net revenue of $4.319 billion, of which a record $2.23 billion was digital; net income of $806 million; and operating cash flow of $1.067 billion, a record for any fiscal year.

For fiscal year 2015, EA was the top publisher worldwide on PlayStation 4 and Xbox One consoles, driven by the success of Battlefield Hardline, Dragon Age: Inquisition, FIFA 15, NHL15, Madden NFL 15, Battlefield 4 and FIFA 14.

Monthly active users for EA’s mobile titles averaged more than 165 million in the fiscal fourth quarter.

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EA has announced that its board of directors authorized a new program to repurchase up to $1 billion of common stock. This new stock repurchase program will expire on May 31, 2017. However, during this quarter, EA repurchased 1.8 million shares for $95 million.

Andrew Wilson, CEO of EA, said:

With a clear focus on putting our players first, FY15 was an exceptional year for Electronic Arts. We introduced award-winning games, delivered enduring entertainment in our live services, and forged deeper relationships with a growing global audience across consoles, mobile devices and PC. EA continues to sharpen our focus and speed, and in the year ahead we will engage more players on more platforms with new experiences like Star Wars Battlefront, FIFA 16, Minions Paradise and more.

Blake Jorgensen, CFO, added:

Two years ago, we discussed a three-year plan to double non-GAAP operating margins to 20%. Today, I’m happy to announce that we exceeded our goal a full year ahead of schedule. Looking forward, we anticipate continued earnings growth driven by our strong portfolio, investment in new IP, the market shift to digital, and on-going cost discipline.

EA ended the quarter with cash and cash equivalents totaling $2.07 billion, compared to the same period last year of $1.78 billion.

Shares of EA closed Tuesday down 0.3% at $59.16. Following the release of the earnings report, shares were up about 5% at $62.00 in after-hours trading. The stock has a consensus analyst price target of $59.70 and a 52-week trading range of $28.03 to $60.63.

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