What to Look for in EA Earnings

Print Email

[UPDATE] Electronic Arts Inc. (NASDAQ: EA) is now scheduled to release its fiscal first-quarter financial results after the markets close on Tuesday, August 2, 2016. This leading video game developer should benefit from not only the continuing rise in new console sales, but also the rising trend of mobile gaming, although it has to get through this quarter first. Analysts aren’t too keen for this first quarter but that’s not to say that EA won’t beat earnings.

The Thomson Reuters consensus estimates call for a net loss of $0.02 per share on $652.64 million in revenue. In the same period of last year, it posted $0.15 in earnings per share (EPS) on revenue of $693 million.

In the most recent earnings report, the company issued guidance for this quarter calling for a net loss of $0.05 per share on $640 million in revenue.

This 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 also very well known for its EA sports games like Madden Football, 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.

EA reported solid earnings back in May, and the company’s Battlefield 1 game has had incredible positive feedback. In fact, the video trailer for the new game had an incredible 21 million view in just four days on YouTube. Baird analysts now think that the company’s current guidance for the game is conservative, and the Titanfall 2 game could ship 10 million to 11 million units. Some analysts also expect 45% growth in next-generation consoles this year, another added bonus for the company.

During the fiscal fourth quarter, EA was ranked as the top publisher in the Western World on PlayStation 4 and Xbox One consoles for fiscal year 2016, according to EA estimates and the company’s available sources.

A few analysts weighed in on EA prior to the release of the earnings report:

  • Jefferies reiterated a Buy rating.
  • Stifel reiterated a Buy rating with an $80 price target.
  • BMO Capital Markets reiterated a Hold rating.
  • Merrill Lynch reiterated a Buy rating.
  • Pacific Crest reiterated a Hold rating.

So far in 2016, EA has outperformed the broad markets, with the stock up about 14%. Over the past 52 weeks, the stock is up only 6%.

Shares of EA were trading down about 1.6% at $76.99 on Tuesday, with a consensus analyst price target of $85.39 and a 52-week trading range of $53.01 to $79.99.

I'm interested in the Newsletter