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Electronic Arts (EA) to Report Q1 Earnings: What's in Store?
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Electronic Arts (EA - Free Report) is set to report first-quarter fiscal 2022 results on Aug 4.
For the quarter, EA expects GAAP revenues of $1.475 billion. The Zacks Consensus Estimate for first-quarter fiscal 2022 revenues is pegged at $1.27 billion, indicating decline of 8.5% year over year.
The company expects earnings per share of 24 cents for the to-be-reported quarter. The consensus mark for earnings has remained steady at 62 cents per share over the past 30 days, indicating decline of 54.4% year over year.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same in the remaining one, the average surprise being 355%.
Let’s see how things have shaped up prior to this announcement.
EA’s focus on adding updates to its games that feature exciting content including the launch of Mass Effect Legendary Edition and Plants vs. Zombies: Battle For Neighborville Complete Edition is expected to have attracted coronavirus-induced home-confined gamers in the to-be-reported quarter.
Additionally, Knockout City, EA SPORTS FIFA 21, Need for Speed Hot Pursuit Remastered and team-based multiplayer space shooter Star Wars: Squadrons are expected to have been major contributors to active user engagement in the to-be-reported quarter.
Solid popularity of gaming franchises like The Sims 4 and Apex Legends is expected to have benefited EA’s net bookings in the to-be-reported quarter. Notably, the company expects net bookings to be $1.25 billion in the fiscal first quarter.
Strong popularity of EA Sports franchises, NHL 21 and Madden NFL 21 is expected to have contributed to top-line growth in the soon-to-be-reported quarter.
Moreover, steady video game spending is expected to have benefited Electronic Arts. Per Venturebeat, which cited NPD data, despite a slight dip of 2% in U.S. video game sales in April, consumer spend on video games increased 3% and 5% year over year in May and June, respectively.
Further, EA's strength in Live Services in mobile games such as Madden Mobile, FIFA Mobile and Star Wars: Galaxy of Heroes is expected to have positively impacted the top line.
The acquisition of Glu Mobile is expected to have aided growth of this Zacks Rank #2 (Buy) company’s mobile business, building on its network of 100 million monthly active players in mobile, and creating a market-leading portfolio of more than 15 top live services across multiple fast-growing genres. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, EA faces stiff competition from the likes of Take Two Interactive Software (TTWO - Free Report) , Nintendo (NTDOY - Free Report) , Zynga and Activision Blizzard apart from Tencent and Epic Games.
Further, increasing expenses toward game development and marketing are expected to have kept margins under pressure in the to-be-reported quarter.
Key Developments in Q1
On Jun 23, EA announced the acquisition of Playdemic, a premier mobile gaming company known for its award-winning game Golf Clash, to add to its mobile portfolio. Notably, Playdemic was previously owned by WarnerBros Games.
On May 5, EA announced the acquisition of Metalhead Software, a talented Canada-based video game studio and developer of the Super Mega Baseball franchise. EA SPORTS and Metalhead are teaming up to expand the Super Mega Baseball franchise as well as develop new gaming and sports experiences for players worldwide.
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Electronic Arts (EA) to Report Q1 Earnings: What's in Store?
Electronic Arts (EA - Free Report) is set to report first-quarter fiscal 2022 results on Aug 4.
For the quarter, EA expects GAAP revenues of $1.475 billion. The Zacks Consensus Estimate for first-quarter fiscal 2022 revenues is pegged at $1.27 billion, indicating decline of 8.5% year over year.
The company expects earnings per share of 24 cents for the to-be-reported quarter. The consensus mark for earnings has remained steady at 62 cents per share over the past 30 days, indicating decline of 54.4% year over year.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same in the remaining one, the average surprise being 355%.
Let’s see how things have shaped up prior to this announcement.
Electronic Arts Inc. Price and EPS Surprise
Electronic Arts Inc. price-eps-surprise | Electronic Arts Inc. Quote
Factors to Consider
EA’s focus on adding updates to its games that feature exciting content including the launch of Mass Effect Legendary Edition and Plants vs. Zombies: Battle For Neighborville Complete Edition is expected to have attracted coronavirus-induced home-confined gamers in the to-be-reported quarter.
Additionally, Knockout City, EA SPORTS FIFA 21, Need for Speed Hot Pursuit Remastered and team-based multiplayer space shooter Star Wars: Squadrons are expected to have been major contributors to active user engagement in the to-be-reported quarter.
Solid popularity of gaming franchises like The Sims 4 and Apex Legends is expected to have benefited EA’s net bookings in the to-be-reported quarter. Notably, the company expects net bookings to be $1.25 billion in the fiscal first quarter.
Strong popularity of EA Sports franchises, NHL 21 and Madden NFL 21 is expected to have contributed to top-line growth in the soon-to-be-reported quarter.
Moreover, steady video game spending is expected to have benefited Electronic Arts. Per Venturebeat, which cited NPD data, despite a slight dip of 2% in U.S. video game sales in April, consumer spend on video games increased 3% and 5% year over year in May and June, respectively.
Further, EA's strength in Live Services in mobile games such as Madden Mobile, FIFA Mobile and Star Wars: Galaxy of Heroes is expected to have positively impacted the top line.
The acquisition of Glu Mobile is expected to have aided growth of this Zacks Rank #2 (Buy) company’s mobile business, building on its network of 100 million monthly active players in mobile, and creating a market-leading portfolio of more than 15 top live services across multiple fast-growing genres. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, EA faces stiff competition from the likes of Take Two Interactive Software (TTWO - Free Report) , Nintendo (NTDOY - Free Report) , Zynga and Activision Blizzard apart from Tencent and Epic Games.
Further, increasing expenses toward game development and marketing are expected to have kept margins under pressure in the to-be-reported quarter.
Key Developments in Q1
On Jun 23, EA announced the acquisition of Playdemic, a premier mobile gaming company known for its award-winning game Golf Clash, to add to its mobile portfolio. Notably, Playdemic was previously owned by WarnerBros Games.
On May 5, EA announced the acquisition of Metalhead Software, a talented Canada-based video game studio and developer of the Super Mega Baseball franchise. EA SPORTS and Metalhead are teaming up to expand the Super Mega Baseball franchise as well as develop new gaming and sports experiences for players worldwide.