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Electronic Arts (EA) to Report Q4 Earnings: What's in Store?
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Electronic Arts Inc. (EA - Free Report) is scheduled to report fiscal fourth-quarter 2018 results on May 8.
The company beat the Zack Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 22.3%.
Last quarter, the company reported non-GAAP earnings of $2.22 per share that beat the Zacks Consensus Estimate of $2.18 but declined nearly 14% from the year-ago quarter.
Net bookings came in at $1.97 billion, down 4.8% year over year. It also missed the Zacks Consensus Estimate of $2.02 billion.
For the fourth quarter, the company expects GAAP revenues of $1.53 billion. Change in deferred revenues will be ($307) million. Net bookings are expected to be $1.225 billion, which is 12% higher than the year-ago figure backed by growth in live services.
Factors at Play
EA’s popularity is primarily driven by its well-known franchises, which has been the key growth driver. Moreover, shift to digital has proved to be immensely beneficial for the company. Strength in digital business is boosted by live services and mobile games. Live Services is expected to be a key growth driver this quarter as well, driven by FIFA Ultimate Team.
Moreover, EA’s initiatives to expand its mobile business after the success of Star Wars: Galaxy of Heroes and Madden NFL Mobile is a positive. EA launched The Sims Mobile worldwide on iOS and Android devices in the March quarter.
Notably, The Sims is one of the most important revenue generators for EA. The Sims FreePlay recorded enormous success in the last quarter. Moreover, FIFA Mobile continues to be one of the key growth drivers for the company. Last quarter, it added 26 million players.
The fiscal fourth quarter will also include the sale of Burnout Paradise Remastered that was released on Mar 16 and A Way Out on Mar 23.
However, the launch of Star Wars Battlefront 2 was a disappointment for the company. Sluggish performance of the title will continue to be a dampener.
Besides, the growing craze for Epic Games’ Fortnite is an overhang as many analysts fear that engagement will decline due to this.
Rise in operating expenses, mainly due to higher investments in games and live services will weigh on the bottom line.
Stiff competition from other game makers like Activision Blizzard Inc. , Take Two Interactive (TTWO - Free Report) and Glu Mobile Inc. remains a major concern.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Electronic Arts has a Zacks Rank #4 and its Earnings ESP is +0.10%.
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Electronic Arts (EA) to Report Q4 Earnings: What's in Store?
Electronic Arts Inc. (EA - Free Report) is scheduled to report fiscal fourth-quarter 2018 results on May 8.
The company beat the Zack Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 22.3%.
Last quarter, the company reported non-GAAP earnings of $2.22 per share that beat the Zacks Consensus Estimate of $2.18 but declined nearly 14% from the year-ago quarter.
Net bookings came in at $1.97 billion, down 4.8% year over year. It also missed the Zacks Consensus Estimate of $2.02 billion.
For the fourth quarter, the company expects GAAP revenues of $1.53 billion. Change in deferred revenues will be ($307) million. Net bookings are expected to be $1.225 billion, which is 12% higher than the year-ago figure backed by growth in live services.
Factors at Play
EA’s popularity is primarily driven by its well-known franchises, which has been the key growth driver. Moreover, shift to digital has proved to be immensely beneficial for the company. Strength in digital business is boosted by live services and mobile games. Live Services is expected to be a key growth driver this quarter as well, driven by FIFA Ultimate Team.
Moreover, EA’s initiatives to expand its mobile business after the success of Star Wars: Galaxy of Heroes and Madden NFL Mobile is a positive. EA launched The Sims Mobile worldwide on iOS and Android devices in the March quarter.
Notably, The Sims is one of the most important revenue generators for EA. The Sims FreePlay recorded enormous success in the last quarter. Moreover, FIFA Mobile continues to be one of the key growth drivers for the company. Last quarter, it added 26 million players.
The fiscal fourth quarter will also include the sale of Burnout Paradise Remastered that was released on Mar 16 and A Way Out on Mar 23.
However, the launch of Star Wars Battlefront 2 was a disappointment for the company. Sluggish performance of the title will continue to be a dampener.
Besides, the growing craze for Epic Games’ Fortnite is an overhang as many analysts fear that engagement will decline due to this.
Rise in operating expenses, mainly due to higher investments in games and live services will weigh on the bottom line.
Stiff competition from other game makers like Activision Blizzard Inc. , Take Two Interactive (TTWO - Free Report) and Glu Mobile Inc. remains a major concern.
Electronic Arts Inc. Price and EPS Surprise
Electronic Arts Inc. Price and EPS Surprise | Electronic Arts Inc. Quote
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Electronic Arts has a Zacks Rank #4 and its Earnings ESP is +0.10%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>