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Electronic Arts' (EA) Q4 Earnings and Revenues Increase Y/Y
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Electronic Arts (EA - Free Report) reported fourth-quarter fiscal 2022 earnings of 80 cents per share, which surged 207.7% year over year.
Revenues increased 35.6% year over year to $1.82 billion, driven by strong performances by Battlefield, FIFA 22, Madden NFL, It Takes Two, F1, and Mass Effect Legendary Edition.
The Zacks Consensus Estimate for earnings and revenues was pegged at $1.04 per share and $1.76 billion, respectively.
Net bookings increased 17.5% year over year to $1.75 billion, reaching a new fourth-quarter high.
Electronic Arts Inc. Price, Consensus and EPS Surprise
EA’s full-game revenues (24% of total revenues) increased 75.2% year over year to $438 million. Full-game download revenues increased 69% year over year to $312 million. Revenues from packaged goods surged 94% year over year to $126 million.
Live services and other revenues (76% of total revenues) rose 26.6% year over year to $1.38 billion.
Based on platforms, revenues from consoles increased 24% year over year to $1.09 billion in the reported quarter. Revenues from PC & Other increased 42% year over year to $420 million. Revenues from the mobile platform increased 82% year over year to $313 million.
Apex Legends increased over 40% in 2022, taking it past the $2 billion milestone in lifetime net bookings.
Operating Details
EA’s GAAP gross profit rose 36.9% from the year-ago quarter’s levels to $1.40 billion. Gross margin expanded 70 basis points (bps) on a year-over-year basis to 77%.
Operating expenses increased 22.2% year over year to $1.04 billion. As a percentage of revenues, operating expenses decreased from 63.3% in the year-ago quarter to 57% in the reported quarter.
Operating income on a GAAP basis increased 108.6% year over year to $365 million. The operating margin expanded 700 bps year over year to 20% in the reported quarter.
Balance Sheet and Cash Flow
As of Mar 31, 2022, EA had $3.06 billion in cash and short-term investments compared with $3.02 billion as of Dec 31, 2021.
Net cash provided by operating activities in the reported quarter was $444 million against net cash provided in operating activities of $1.53 billion in the previous quarter.
EA repurchased 2.5 million shares for $325 million in the reported quarter.
The company also declared a quarterly cash dividend of 17 cents per share. The dividend will be paid out on Jun 22, 2022, to shareholders of record as of the close of business on Jun 8, 2022.
Guidance
For first-quarter fiscal 2023, EA expects GAAP revenues between $1.675 billion and $1.725 billion and earnings of 75-85 cents per share. Net bookings are expected to be between $1.20 and $1.25 billion.
For fiscal 2023, EA expects revenues in the range of $7.6 billion-$7.7 billion and earnings of $2.79 to $2.87 per share. The company expects net bookings for the year to be between $7.9 billion and $8.1 billion.
Operating cash flow is estimated to be in the band of $1.6 billion to $1.65 billion.
DouYu International is set to announce first-quarter 2022 results on May 17. DouYu International is down 45.1% in the year-to-date period compared with the Zacks Gaming industry’s decline of 41.04%.
F45 Training is set to announce first-quarter 2022 results on May 16. F45 Training is down 39.3% in the year-to-date period compared with the Zacks Consumer Services - Miscellaneous industry’s decline of 18.33%.
Ralph Lauren is scheduled to announce first-quarter 2022 results on May 24. Ralph Lauren is down 20.1% in the year-to-date period compared with the Zacks Textile - Apparel industry’s decline of 31.5%.
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Electronic Arts' (EA) Q4 Earnings and Revenues Increase Y/Y
Electronic Arts (EA - Free Report) reported fourth-quarter fiscal 2022 earnings of 80 cents per share, which surged 207.7% year over year.
Revenues increased 35.6% year over year to $1.82 billion, driven by strong performances by Battlefield, FIFA 22, Madden NFL, It Takes Two, F1, and Mass Effect Legendary Edition.
The Zacks Consensus Estimate for earnings and revenues was pegged at $1.04 per share and $1.76 billion, respectively.
Net bookings increased 17.5% year over year to $1.75 billion, reaching a new fourth-quarter high.
Electronic Arts Inc. Price, Consensus and EPS Surprise
Electronic Arts Inc. price-consensus-eps-surprise-chart | Electronic Arts Inc. Quote
Quarter Details
EA’s full-game revenues (24% of total revenues) increased 75.2% year over year to $438 million. Full-game download revenues increased 69% year over year to $312 million. Revenues from packaged goods surged 94% year over year to $126 million.
Live services and other revenues (76% of total revenues) rose 26.6% year over year to $1.38 billion.
Based on platforms, revenues from consoles increased 24% year over year to $1.09 billion in the reported quarter. Revenues from PC & Other increased 42% year over year to $420 million. Revenues from the mobile platform increased 82% year over year to $313 million.
Apex Legends increased over 40% in 2022, taking it past the $2 billion milestone in lifetime net bookings.
Operating Details
EA’s GAAP gross profit rose 36.9% from the year-ago quarter’s levels to $1.40 billion. Gross margin expanded 70 basis points (bps) on a year-over-year basis to 77%.
Operating expenses increased 22.2% year over year to $1.04 billion. As a percentage of revenues, operating expenses decreased from 63.3% in the year-ago quarter to 57% in the reported quarter.
Operating income on a GAAP basis increased 108.6% year over year to $365 million. The operating margin expanded 700 bps year over year to 20% in the reported quarter.
Balance Sheet and Cash Flow
As of Mar 31, 2022, EA had $3.06 billion in cash and short-term investments compared with $3.02 billion as of Dec 31, 2021.
Net cash provided by operating activities in the reported quarter was $444 million against net cash provided in operating activities of $1.53 billion in the previous quarter.
EA repurchased 2.5 million shares for $325 million in the reported quarter.
The company also declared a quarterly cash dividend of 17 cents per share. The dividend will be paid out on Jun 22, 2022, to shareholders of record as of the close of business on Jun 8, 2022.
Guidance
For first-quarter fiscal 2023, EA expects GAAP revenues between $1.675 billion and $1.725 billion and earnings of 75-85 cents per share. Net bookings are expected to be between $1.20 and $1.25 billion.
For fiscal 2023, EA expects revenues in the range of $7.6 billion-$7.7 billion and earnings of $2.79 to $2.87 per share. The company expects net bookings for the year to be between $7.9 billion and $8.1 billion.
Operating cash flow is estimated to be in the band of $1.6 billion to $1.65 billion.
Zacks Rank & Stocks to Consider
EA currently carries a Zacks Rank #4 (Sell).
EA is down 15.4% in the year-to-date period compared with the Zacks Toys - Games - Hobbies industry’s decline of 4.7% and the Consumer Discretionary sector’s fall of 32.1%.
Some better-ranked stocks from the Zacks Consumer Discretionary sector are DouYu International (DOYU - Free Report) , F45 Training (FXLV - Free Report) and Ralph Lauren (RL - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
DouYu International is set to announce first-quarter 2022 results on May 17. DouYu International is down 45.1% in the year-to-date period compared with the Zacks Gaming industry’s decline of 41.04%.
F45 Training is set to announce first-quarter 2022 results on May 16. F45 Training is down 39.3% in the year-to-date period compared with the Zacks Consumer Services - Miscellaneous industry’s decline of 18.33%.
Ralph Lauren is scheduled to announce first-quarter 2022 results on May 24. Ralph Lauren is down 20.1% in the year-to-date period compared with the Zacks Textile - Apparel industry’s decline of 31.5%.