Electronic Arts (EA - Free Report) reported third-quarter fiscal 2019 earnings of 86 cents per share against loss of 60 cents per share in the year-ago quarter. The bottom-line improvement was driven by robust performance of FIFA franchise and The Sims franchise.
The Zacks Consensus Estimate was pegged at $1.93.
Revenues increased 11.1% year over year to $1.29 billion but lagged the guided figure of $1.38 billion.
Net bookings declined 18.4% year over year to $1.6 billion. Digital net bookings were $1.2 million in the third quarter, down 3% year over year.
Delay in the launch of Battlefield V coupled with the absence of Battle Royale mode adversely affected EA’s top line. Management stated that Battlefield 1 has 4 million monthly active users (MAU) while Battlefield 4 has 2 million. The company will be rolling out Battle Royale mode for Battlefield V in March.
Moreover, the company also witnessed sluggish growth of Command & Conquer: Rivals, which resulted in a decline in net bookings year over year.
Quarter Details
EA’s digital revenues (70.4% of revenues) increased 16.4% to $908 million. Notably, 47% of sales made by the company, in the past one year, were through digital channels. Revenues from EA’s Packaging goods and other segment (29.6% of revenues) stayed flat at $381 million.
Further segregating digital revenues, full game download revenues (19.2% of total revenues) increased 72.7% to $247 million.
Revenues from Live services (37.2%) were up 0.8% to $480 million. Live services net bookings were $784 million, down 0.4% year over year. The company witnessed year-over-year increase in monthly active players for The Sims 4. Additionally, the franchise crossed $1 billion in lifetime revenues. Its user base expanded 4.8 million in the past year.
FIFA Ultimate Team was up 6% year over year, an all-time high due to the addition of e-sports. However, the growth in FIFA Ultimate Team was inadequate to offset the decline in Battlefield 1 live services and FIFA Online in Asia.
EA mobile games revenues (14%) jumped 12.4% year over year to $181 million. Net bookings decreased 22% year over year to $142 million due to unfavorable changes made in Madden Mobile, which resulted in a decline in monetization. Further, the underperformance of Command & Conquer: Rivals is a concern. The company is witnessing slow growth in Asian markets and the transition to FIFA Online 4 has been slower than anticipated, which is affecting EA’s top line.
On the basis of platforms, revenues from console (68.7% of revenues) increased 9.3% to $885 million and revenues from mobile platform (14%) increased 9% to $181 million. Revenues from PC (16.8% of revenues) increased 20% to $217 million.
EA stated that it witnessed an addition of four million new players to FIFA franchise through consoles and PC. Notably, FIFA 19 was the best-selling console game in Europe last calendar year.
Electronic Arts Inc. Price, Consensus and EPS Surprise
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Electronic Arts (EA - Free Report) reported third-quarter fiscal 2019 earnings of 86 cents per share against loss of 60 cents per share in the year-ago quarter. The bottom-line improvement was driven by robust performance of FIFA franchise and The Sims franchise.
The Zacks Consensus Estimate was pegged at $1.93.
Revenues increased 11.1% year over year to $1.29 billion but lagged the guided figure of $1.38 billion.
Net bookings declined 18.4% year over year to $1.6 billion. Digital net bookings were $1.2 million in the third quarter, down 3% year over year.
Delay in the launch of Battlefield V coupled with the absence of Battle Royale mode adversely affected EA’s top line. Management stated that Battlefield 1 has 4 million monthly active users (MAU) while Battlefield 4 has 2 million. The company will be rolling out Battle Royale mode for Battlefield V in March.
Moreover, the company also witnessed sluggish growth of Command & Conquer: Rivals, which resulted in a decline in net bookings year over year.
Quarter Details
EA’s digital revenues (70.4% of revenues) increased 16.4% to $908 million. Notably, 47% of sales made by the company, in the past one year, were through digital channels. Revenues from EA’s Packaging goods and other segment (29.6% of revenues) stayed flat at $381 million.
Further segregating digital revenues, full game download revenues (19.2% of total revenues) increased 72.7% to $247 million.
Revenues from Live services (37.2%) were up 0.8% to $480 million. Live services net bookings were $784 million, down 0.4% year over year. The company witnessed year-over-year increase in monthly active players for The Sims 4. Additionally, the franchise crossed $1 billion in lifetime revenues. Its user base expanded 4.8 million in the past year.
FIFA Ultimate Team was up 6% year over year, an all-time high due to the addition of e-sports. However, the growth in FIFA Ultimate Team was inadequate to offset the decline in Battlefield 1 live services and FIFA Online in Asia.
EA mobile games revenues (14%) jumped 12.4% year over year to $181 million. Net bookings decreased 22% year over year to $142 million due to unfavorable changes made in Madden Mobile, which resulted in a decline in monetization. Further, the underperformance of Command & Conquer: Rivals is a concern. The company is witnessing slow growth in Asian markets and the transition to FIFA Online 4 has been slower than anticipated, which is affecting EA’s top line.
On the basis of platforms, revenues from console (68.7% of revenues) increased 9.3% to $885 million and revenues from mobile platform (14%) increased 9% to $181 million. Revenues from PC (16.8% of revenues) increased 20% to $217 million.
EA stated that it witnessed an addition of four million new players to FIFA franchise through consoles and PC. Notably, FIFA 19 was the best-selling console game in Europe last calendar year.
Electronic Arts Inc. Price, Consensus and EPS Surprise
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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