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What to Expect From Electronic Arts Earnings

Electronic Arts Inc. (NASDAQ: EA) will report its fiscal fourth-quarter financial results Tuesday after the markets have closed. Thomson Reuters has consensus estimates of $0.25 in earnings per share (EPS) on $850.23 million in revenue. In the same period of the previous year, the game maker posted EPS of $0.48 and $914.00 million in revenue.

Video games may be the new favorite pastime in America. Due to rising interest from the rest of the world, video game companies may face currency pressures similar to other international companies as well. A new research report highlights some of those currency risks and also addresses the prospects of these companies with a new slate of video games set to hit the shelves in the coming weeks and months.

Credit Suisse updated its estimates as it factors in the appreciation of the U.S. dollar versus the major global currencies. Currency headwinds are expected to account for a 2% to 5% decrease to revenue and adjusted earnings.

Credit Suisse made extensive changes to its longer term estimates for Electronic Arts:

  • Added free-to-play versions of Need for Speed and Battlefield
  • Removed long-term MMORPG products from the release slate for fiscal year 2020 and fiscal year 2021
  • Increased growth trajectory for mobile game revenue by an incremental $100 million per year
  • Explicit contribution from Madden Ultimate Team

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It is also worth mentioning that this leading game developer should benefit from not only the continuing rise in new console sales, but the rising trend of mobile gaming. The company produces top-selling games and related content and services under the EA brand in various categories, including action-adventure, role-playing, racing and first-person shooter games. It is very well-known for its EA sports games like Madden Football. Electronic Arts has made the move into mobile play by adapting many of the top franchise titles, which have been popular for years, into the mobile arena.

Electronic Arts shares were down 0.8% at $58.85 on Tuesday afternoon ahead of earnings. 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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