What to Look for in EA Earnings

October 31, 2016 by Chris Lange

Electronic Arts Inc. (NASDAQ: EA) is scheduled to report fiscal second-quarter financial results after markets close on Tuesday. The consensus estimates from Thomson Reuters are calling for $0.43 in earnings per share (EPS) and $1.09 billion in revenue. The same period from last year had $0.65 in EPS and $1.15 billion in revenue.

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. EA 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.

The company, which is 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 that have been popular for years into the mobile arena.

The company reported solid earnings in the previous quarter, and its Battlefield 1 game has had incredible positive feedback. In fact, the video trailer for the new game had an incredible 21 million views in just four days on YouTube. Some analysts now think that the company’s current guidance for the game is conservative, and the Titanfall 2 game could also 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.

A few analysts weighed in on EA ahead of the report:

  • Cowen has a Market Perform rating.
  • Wedbush has a Neutral rating.
  • Piper Jaffray has an Overweight rating.
  • Merrill Lynch has a Neutral rating.
  • Stifel has an Outperform rating with a $88 price target.

So far in 2016, EA has outperformed the broad markets, with the stock up 14%. Over the past 52 weeks, the stock is actually up 9%.

Shares of EA were last trading at $78.74, with a consensus analyst price target of $90.25 and a 52-week trading range of $53.01 to $86.07.

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