We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Electronic Arts' (EA) Q3 Earnings and Revenues Rise Y/Y
Read MoreHide Full Article
Electronic Arts (EA - Free Report) reported third-quarter fiscal 2024 earnings of $2.96 per share, which jumped 9.2% year over year.
Revenues increased 3.4% year over year to $1.94 billion, driven by new releases, continued live services growth and healthy engagement.
The Zacks Consensus Estimate for earnings was pegged at $2.92 per share. The consensus mark for revenues was pinned at $2.39 billion.
Net bookings for the third quarter were $2.36 billion, up 1% year over year or 2% in constant currency (cc). The figure missed the Zacks Consensus Estimate by 0.73%.
Live services net bookings were $1.71 billion, up 3% year over year or 5% in cc.
Electronic Arts Inc. Price, Consensus and EPS Surprise
EA’s full-game revenues (31.8% of total revenues) decreased 0.6% year over year to $618 million. The figure beat the Zacks Consensus Estimate by 15.22%.
Full-game download revenues increased 2% year over year to $431 million. The figure beat the Zacks Consensus Estimate by 18.7%.
Revenues from packaged goods remained flat year over year at $187 million. The figure beat the Zacks Consensus Estimate by 7.91%.
Live services and other revenues (68.2% of total revenues) increased 5.4% year over year to $1.33 billion. The figure beat the Zacks Consensus Estimate by 1.46%.
Based on platforms, revenues from consoles increased 7% year over year to $1.23 billion in the reported quarter. The figure beat the Zacks Consensus Estimate by 10.98%.
Revenues from PC & Other declined 3% year over year to $420 million. The figure missed the consensus mark by 4.16%.
Revenues from the mobile platform increased 1% year over year to $296 million. The figure missed the Zacks Consensus Estimate by 0.87%.
Gaming Metrics
EA SPORTS Madden NFL delivered a strong quarter, with net bookings up 5% year over year, as exciting new in-game innovations continued to drive growth across player acquisition and engagement.
EA SPORTS FC was a huge achievement for EA. In the third quarter, the total global football business significantly exceeded expectations. The franchise outperformed third-quarter expectations, delivering 7% net bookings growth compared with a prior year that included the World Cup.
New releases of EA SPORTS UFC, NHL and World Rally Championship contributed to further expanding the aggregate fandom and strength of the EA SPORTS community, creating additional value-added services in one of the largest sports brands and platforms in the world.
Apex Legends did not meet the company’s expectations, as the teams continued to learn and iterate with each new season and event. In the past few weeks, the recent cross-over promotion showed promising early signals, delivering two of the highest net bookings days over the fiscal year. With the launch of Season 20 in February, the teams will deliver more innovation as they continue to build for the long term.
Operating Details
EA’s GAAP gross profit rose 7.8% from the year-ago quarter’s levels to $1.42 billion. Gross margin expanded 300 basis points (bps) on a year-over-year basis to 72.8%.
Operating expenses increased 2.6% year over year to $1.051 billion. As a percentage of revenues, operating expenses contracted 40 bps on a year-over-year basis to 54%.
Operating income on a GAAP basis increased 26.3% year over year to $365 million. The operating margin expanded 340 bps year over year to 18.8% in the reported quarter.
Balance Sheet and Cash Flow
As of Dec 31, 2023, EA had $3.1 billion in cash and short-term investments compared with $2.3 billion as of Sep 30, 2023.
Net cash provided by operating activities for the quarter was $1.264 billion, up 13% year over year. For the trailing 12 months, net cash provided by operating activities was a record $2.352 billion.
EA repurchased 2.5 million shares for $325 million during the quarter, bringing the total for the trailing 12 months to 10.4 million shares for $1.300 billion.
EA has declared a quarterly cash dividend of 19 cents per share of the company’s common stock. The dividend is payable on Mar 20, 2024, to shareholders of record as of the close of business on Feb 28, 2024.
Guidance
For fourth-quarter fiscal 2024, EA expects GAAP revenues between $1.625 billion and $1.925 billion and diluted earnings in the range of 20-68 cents per share. Net bookings are expected between $1.625 billion and $1.925 billion.
For fiscal 2024, EA expects revenues in the range of $7.408-$7.708 billion and diluted earnings of $4.21-$4.68 per share.
The company expects net bookings guidance for the year between $7.389 billion and $7.689 billion.
Operating cash flow is estimated in the band of $1.95-$2.1 billion.
Image: Bigstock
Electronic Arts' (EA) Q3 Earnings and Revenues Rise Y/Y
Electronic Arts (EA - Free Report) reported third-quarter fiscal 2024 earnings of $2.96 per share, which jumped 9.2% year over year.
Revenues increased 3.4% year over year to $1.94 billion, driven by new releases, continued live services growth and healthy engagement.
The Zacks Consensus Estimate for earnings was pegged at $2.92 per share. The consensus mark for revenues was pinned at $2.39 billion.
Net bookings for the third quarter were $2.36 billion, up 1% year over year or 2% in constant currency (cc). The figure missed the Zacks Consensus Estimate by 0.73%.
Live services net bookings were $1.71 billion, up 3% year over year or 5% in cc.
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 (31.8% of total revenues) decreased 0.6% year over year to $618 million. The figure beat the Zacks Consensus Estimate by 15.22%.
Full-game download revenues increased 2% year over year to $431 million. The figure beat the Zacks Consensus Estimate by 18.7%.
Revenues from packaged goods remained flat year over year at $187 million. The figure beat the Zacks Consensus Estimate by 7.91%.
Live services and other revenues (68.2% of total revenues) increased 5.4% year over year to $1.33 billion. The figure beat the Zacks Consensus Estimate by 1.46%.
Based on platforms, revenues from consoles increased 7% year over year to $1.23 billion in the reported quarter. The figure beat the Zacks Consensus Estimate by 10.98%.
Revenues from PC & Other declined 3% year over year to $420 million. The figure missed the consensus mark by 4.16%.
Revenues from the mobile platform increased 1% year over year to $296 million. The figure missed the Zacks Consensus Estimate by 0.87%.
Gaming Metrics
EA SPORTS Madden NFL delivered a strong quarter, with net bookings up 5% year over year, as exciting new in-game innovations continued to drive growth across player acquisition and engagement.
EA SPORTS FC was a huge achievement for EA. In the third quarter, the total global football business significantly exceeded expectations. The franchise outperformed third-quarter expectations, delivering 7% net bookings growth compared with a prior year that included the World Cup.
New releases of EA SPORTS UFC, NHL and World Rally Championship contributed to further expanding the aggregate fandom and strength of the EA SPORTS community, creating additional value-added services in one of the largest sports brands and platforms in the world.
Apex Legends did not meet the company’s expectations, as the teams continued to learn and iterate with each new season and event. In the past few weeks, the recent cross-over promotion showed promising early signals, delivering two of the highest net bookings days over the fiscal year. With the launch of Season 20 in February, the teams will deliver more innovation as they continue to build for the long term.
Operating Details
EA’s GAAP gross profit rose 7.8% from the year-ago quarter’s levels to $1.42 billion. Gross margin expanded 300 basis points (bps) on a year-over-year basis to 72.8%.
Operating expenses increased 2.6% year over year to $1.051 billion. As a percentage of revenues, operating expenses contracted 40 bps on a year-over-year basis to 54%.
Operating income on a GAAP basis increased 26.3% year over year to $365 million. The operating margin expanded 340 bps year over year to 18.8% in the reported quarter.
Balance Sheet and Cash Flow
As of Dec 31, 2023, EA had $3.1 billion in cash and short-term investments compared with $2.3 billion as of Sep 30, 2023.
Net cash provided by operating activities for the quarter was $1.264 billion, up 13% year over year. For the trailing 12 months, net cash provided by operating activities was a record $2.352 billion.
EA repurchased 2.5 million shares for $325 million during the quarter, bringing the total for the trailing 12 months to 10.4 million shares for $1.300 billion.
EA has declared a quarterly cash dividend of 19 cents per share of the company’s common stock. The dividend is payable on Mar 20, 2024, to shareholders of record as of the close of business on Feb 28, 2024.
Guidance
For fourth-quarter fiscal 2024, EA expects GAAP revenues between $1.625 billion and $1.925 billion and diluted earnings in the range of 20-68 cents per share. Net bookings are expected between $1.625 billion and $1.925 billion.
For fiscal 2024, EA expects revenues in the range of $7.408-$7.708 billion and diluted earnings of $4.21-$4.68 per share.
The company expects net bookings guidance for the year between $7.389 billion and $7.689 billion.
Operating cash flow is estimated in the band of $1.95-$2.1 billion.
Zacks Rank & Other Stocks to Consider
EA currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Consumer Discretionary sector are Flexsteel Industries (FLXS - Free Report) , Universal Technical Institute (UTI - Free Report) and TakeTwo Interactive (TTWO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flexsteel Industries, Universal Technical Institute and TakeTwo are scheduled to report the quarterly results on Feb 5, Feb 7 and Feb 8, respectively.
The Zacks Consensus Estimate for FLXS’ first-quarter 2024 earnings per share is pegged at 57 cents, up by 30 cents over the past 30 days.
The Zacks Consensus Estimate for UTI’s first-quarter 2024 earnings per share is pegged at 6 cents, which has remained unchanged over the past 30 days.
The Zacks Consensus Estimate for TTWO’s first-quarter 2024 earnings per share is pegged at 72 cents, down by 1 cent over the past 30 days.