Electronic Arts Earnings: Crushes Estimates, Outlook Disappoints

S&P 500 (NYSE:SPY) component Electronic Arts Inc. (NASDAQ:EA) reported net income above Wall Street’s expectations for the fourth quarter. Electronic Arts develops and distributes video game software and content across a variety of platforms.

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Electronic Arts Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Electronic Arts Inc. rose to $400 million ($1.20 per share) vs. $151 million (45 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year-earlier quarter.

Revenue: Rose 25.5% to $1.37 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Electronic Arts Inc. reported adjusted net income of 17 cents per share. By that measure, the company beat the mean estimate of 6 cents per share. It beat the average revenue estimate of $958.5 million.

Quoting Management: “We are proud to report a strong quarter and a fiscal year highlighted with $1.2 billion of digital revenue,” said Chief Executive Officer John Riccitiello. “In the coming year, we break away from the pack, with a very different profile than the traditional game companies and capabilities that none of our new digital competitors can match.”

Key Stats:

Revenue has increased for four quarters in a row. Revenue increased 0.8% to $1.06 billion in the third quarter. The figure rose 13.3% in the second quarter from the year earlier and climbed 22.6% in the first quarter from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 3 cents in the third quarter and by 7 cents in the second quarter.

EA reported a profit in the latest quarter, breaking a two-quarter streak of losses. The company reported a net loss of $205 million in the third quarter and a loss of $340 million in the second quarter.

Looking Forward: For the past two months, analysts have become increasingly pessimistic about the results for the company next quarter. The average estimate for the first quarter of the next fiscal year is a loss of 44 cents per share, down from a loss of 42 cents sixty days ago. For the fiscal year, the average estimate has moved down from 48 cents a share to 45 cents over the last sixty days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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