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Electronic Arts (EA) to Report Q3 Earnings: What's in Store?

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Electronic Arts (EA - Free Report) is set to report third-quarter fiscal 2020 results on Jan 30.

For the quarter, EA expects GAAP revenues of $1.510 billion.

The Zacks Consensus Estimate for third-quarter 2020 revenues is pegged at $1.96 billion, which indicates growth of 22.1% from the year-ago quarter’s reported figure.

The company expects GAAP earnings to be 92 cents per share. The consensus mark for earnings has increased by a penny to $2.52 per share over the past seven days.

Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average negative surprise being 58.48%.

Electronic Arts Inc. Price and EPS Surprise

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 and new technology makes the platform attractive to users.

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, net bookings are expected to be $1.940 billion for the third quarter as guided by the company.

Additionally, the successful rollout of EA Sports content such as EA SPORTS FIFA 20 Global Series, which received tremendous initial response, is likely to have increased viewership and drawn more users to the platform globally in the third quarter.

Notably, on Oct 10, EA SPORTS FIFA 20 Global Series recorded 10 million players in the game since EA Access and Origin Access launch on Sep 19. Moreover, FIFA 20 players surpassed 450 million matches played, with 1.2 billion goals scored across all modes in the game.

Moreover, new game releases such as Plants vs. Zombies: Battle for Neighborville, Need for Speed Heat and Star Wars Jedi: Fallen Order from popular franchises are expected to have driven user engagement levels and growth in active player accounts in the to-be-reported quarter.

Notably, the company also announced a first-time licensing partnership with Formula 1 and launched Real Racing 3’s newest update with F1 content during the third quarter.

Further, EA's strength in Live Services from mobile games such as Madden Mobile, FIFA Mobile and Star Wars: Galaxy of Heroes is expected to have positively impacted the top line.

The company also introduced various in-game passes, challenges and events for users to subscribe during the quarter, which is likely to have aided growth in subscription revenues from live services on mobile, PC and console.

Notably, launch of EA Access on Playstation 4 in the previous quarter is expected to have contributed to the company’s subscription revenues in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

EA has an Earnings ESP of +1.43% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few other stocks you may also want to consider, as our model shows that these too have the right combination of elements to deliver an earnings beat.

Dish Network Corporation has an Earnings ESP of +1.94% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cable One Inc. (CABO - Free Report) has an Earnings ESP of +3.89% and a Zacks Rank #1.

WW International, Inc. (WW - Free Report) has an Earnings ESP of +13.98% and a Zacks Rank #2.

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