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Electronic Arts (EA) to Report Q4 Earnings: What's in Store?
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Electronic Arts (EA - Free Report) is set to report fourth-quarter fiscal 2020 results on May 5.
For the quarter, EA expects GAAP revenues of $1.325 billion.
The Zacks Consensus Estimate for fourth-quarter 2020 revenues is pegged at $1.17 billion, which indicates a decline of 13.9% from the year-ago quarter reported figure.
The company expects GAAP earnings to be $1.05 per share indicating a decrease of 25.5% year over year. The consensus mark for earnings has remained steady at 98 cents per share over the past 30 days.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one quarter, the average negative surprise being 57.75%.
Let’s see how things have shaped up prior to this announcement.
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. Moreover, coronavirus-led lockdown is expected to be a major growth driver in increasing the number of active users 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, net bookings are expected to be $1.152 billion for the fourth quarter as guided by the company.
Strong popularity of two well-recognized EA Sports franchises, FIFA and Madden NFL, is expected to have contributed to top-line growth in the soon-to-be-reported quarter.
Moreover, new modes like Superstar KO and Madden NFL E-sports broadcasts are expected to have witnessed an increase in fan base and viewership globally amid coronavirus-induced lockdown.
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.
Notably, EA Access on PS 4 is expected to have continued contributing to the company’s subscription revenues in the to-be-reported amid coronavirus-induced lockdown.
However, intensifying competition in the video game space from the likes of Activision, Take-Two Interactive and Zynga is likely to have hurt top-line growth.
Moreover, unlike its competitors, lack of major game releases during the to-be-reported quarter is likely to have resulted in slow new user growth and lower active user engagement.
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.
Electronic Arts has an Earnings ESP of +4.41% and a Zacks Rank #2. 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 companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Mattel, Inc. (MAT - Free Report) has an Earnings ESP of +1.66% and a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Electronic Arts (EA) to Report Q4 Earnings: What's in Store?
Electronic Arts (EA - Free Report) is set to report fourth-quarter fiscal 2020 results on May 5.
For the quarter, EA expects GAAP revenues of $1.325 billion.
The Zacks Consensus Estimate for fourth-quarter 2020 revenues is pegged at $1.17 billion, which indicates a decline of 13.9% from the year-ago quarter reported figure.
The company expects GAAP earnings to be $1.05 per share indicating a decrease of 25.5% year over year. The consensus mark for earnings has remained steady at 98 cents per share over the past 30 days.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one quarter, the average negative surprise being 57.75%.
Electronic Arts Inc. Price and EPS Surprise
Electronic Arts Inc. price-eps-surprise | Electronic Arts Inc. Quote
Let’s see how things have shaped up prior to this announcement.
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. Moreover, coronavirus-led lockdown is expected to be a major growth driver in increasing the number of active users 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, net bookings are expected to be $1.152 billion for the fourth quarter as guided by the company.
Strong popularity of two well-recognized EA Sports franchises, FIFA and Madden NFL, is expected to have contributed to top-line growth in the soon-to-be-reported quarter.
Moreover, new modes like Superstar KO and Madden NFL E-sports broadcasts are expected to have witnessed an increase in fan base and viewership globally amid coronavirus-induced lockdown.
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.
Notably, EA Access on PS 4 is expected to have continued contributing to the company’s subscription revenues in the to-be-reported amid coronavirus-induced lockdown.
However, intensifying competition in the video game space from the likes of Activision, Take-Two Interactive and Zynga is likely to have hurt top-line growth.
Moreover, unlike its competitors, lack of major game releases during the to-be-reported quarter is likely to have resulted in slow new user growth and lower active user engagement.
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.
Electronic Arts has an Earnings ESP of +4.41% and a Zacks Rank #2. 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 companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Mattel, Inc. (MAT - Free Report) has an Earnings ESP of +1.66% and a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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