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EA’s full-game revenues (31.6% of total revenues) decreased 2.4% year over year to $602 million. Full-game download revenues decreased 3% year over year to $328 million. Revenues from packaged goods declined 2% year over year to $274 million.
Live services and other revenues (68.4% of total revenues) rose 7.7% year over year to $1.30 billion.
Based on platforms, revenues from consoles decreased 3% year over year to $1.16 billion in the reported quarter. Revenues from PC & Other increased 12% year over year to $423 million. Revenues from the mobile platform increased 27% year over year to $320 million.
Operating Details
EA’s GAAP gross profit rose 8.3% from the year-ago quarter’s levels to $1.44 billion. Gross margin expanded 280 basis points (bps) on a year-over-year basis to 75.7%.
Operating expenses increased 2.3% year over year to $1.01 billion. As a percentage of revenues, operating expenses contracted 100 bps on a year-over-year basis to 53.3%.
Operating income on a GAAP basis increased 25.6% year over year to $427 million. The operating margin expanded 380 bps year over year to 22.4% in the reported quarter.
Balance Sheet and Cash Flow
As of Sep 30, 2022, EA had $1.53 billion in cash and short-term investments compared with $2.41 billion as of Jun 30, 2022.
Net cash used in operating activities in the reported quarter was $112 million against net cash used in operating activities of $78 million in the previous quarter.
EA repurchased 2.6 million shares for $325 million during the quarter, bringing the total for the trailing twelve months to 10 million shares for $1.295 billion.
EA paid a cash dividend of $0.19 per share during the quarter for a total of $53 million. The company also declared a quarterly cash dividend of $0.19 per share. The dividend will be paid out on Dec 21, 2022, to shareholders of record as of the close of business on Nov 30, 2022.
Guidance
For third-quarter fiscal 2023, EA expects GAAP revenues between $1.825 billion and $1.925 billion and earnings in the range of 43-59 cents per share. Net bookings are expected to be between $2.425 billion and $2.525 billion.
For fiscal 2023, EA expects revenues in the range of $7.55-$7.75 billion and diluted earnings of $3.11 to $3.34 per share. The company expects net bookings for the year to be between $7.65 billion and $7.85 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 4.3% in the year-to-date period compared with the Consumer Discretionary sector’s fall of 36.9%.
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Electronic Arts' (EA) Q2 Earnings and Revenues Increase Y/Y
Electronic Arts (EA - Free Report) reported second-quarter fiscal 2023 earnings of $1.07 per share, which increased 4.9% year over year.
Revenues increased 4.3% year over year to $1.90 billion, driven by strength in EA SPORTS portfolio and multi-platform live services business.
The Zacks Consensus Estimate for earnings and revenues was pegged at $1.35 per share and $1.78 billion, respectively.
Net bookings decreased 5.2% year over year to $1.75 billion.
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 (31.6% of total revenues) decreased 2.4% year over year to $602 million. Full-game download revenues decreased 3% year over year to $328 million. Revenues from packaged goods declined 2% year over year to $274 million.
Live services and other revenues (68.4% of total revenues) rose 7.7% year over year to $1.30 billion.
Based on platforms, revenues from consoles decreased 3% year over year to $1.16 billion in the reported quarter. Revenues from PC & Other increased 12% year over year to $423 million. Revenues from the mobile platform increased 27% year over year to $320 million.
Operating Details
EA’s GAAP gross profit rose 8.3% from the year-ago quarter’s levels to $1.44 billion. Gross margin expanded 280 basis points (bps) on a year-over-year basis to 75.7%.
Operating expenses increased 2.3% year over year to $1.01 billion. As a percentage of revenues, operating expenses contracted 100 bps on a year-over-year basis to 53.3%.
Operating income on a GAAP basis increased 25.6% year over year to $427 million. The operating margin expanded 380 bps year over year to 22.4% in the reported quarter.
Balance Sheet and Cash Flow
As of Sep 30, 2022, EA had $1.53 billion in cash and short-term investments compared with $2.41 billion as of Jun 30, 2022.
Net cash used in operating activities in the reported quarter was $112 million against net cash used in operating activities of $78 million in the previous quarter.
EA repurchased 2.6 million shares for $325 million during the quarter, bringing the total for the trailing twelve months to 10 million shares for $1.295 billion.
EA paid a cash dividend of $0.19 per share during the quarter for a total of $53 million. The company also declared a quarterly cash dividend of $0.19 per share. The dividend will be paid out on Dec 21, 2022, to shareholders of record as of the close of business on Nov 30, 2022.
Guidance
For third-quarter fiscal 2023, EA expects GAAP revenues between $1.825 billion and $1.925 billion and earnings in the range of 43-59 cents per share. Net bookings are expected to be between $2.425 billion and $2.525 billion.
For fiscal 2023, EA expects revenues in the range of $7.55-$7.75 billion and diluted earnings of $3.11 to $3.34 per share. The company expects net bookings for the year to be between $7.65 billion and $7.85 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 4.3% in the year-to-date period compared with the Consumer Discretionary sector’s fall of 36.9%.
Some better-ranked stocks in the Consumer Discretionary sector include AMC Entertainment (AMC - Free Report) , Reservoir Media (RSVR - Free Report) and American Public Education (APEI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMC Entertainment, Reservoir Media and American Public Education are each scheduled to report their quarterly results on Nov 8.
The Zacks Consensus Estimate for AMC Entertainment’s third-quarter 2022 loss is pegged at 27 cents per share, up from 25 cents over the past 30 days.
The Zacks Consensus Estimate for Reservoir Media’s third-quarter 2022 earnings is pegged at 5 cents per share, unchanged over the past 30 days.
The consensus mark for American Public Education’s third-quarter 2022 earnings is pegged at 25 cents per share, unchanged in the past 30 days.