S&P 500 (NYSE:SPY) component Electronic Arts Inc. (NASDAQ:EA) posted lower net income in the first quarter compared with a year-earlier period. Electronic Arts develops and distributes video game software and content across a variety of platforms.
Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?
Electronic Arts Inc. Earnings Cheat Sheet
Results: Net income for Electronic Arts Inc. fell to $201 million (63 cents per share) vs. $221 million (66 cents per share) a year earlier. This is a decline of 9% from the year-earlier quarter.
Revenue: Fell 4.4% to $955 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Electronic Arts Inc. beat the mean analyst estimate of 6 cents per share. Analysts were expecting revenue of $958.5 million.
Quoting Management: “We have established an unmatched diversity in our business with multiple brands performing across several channels, business models and geographies,” said Chief Executive Officer John Riccitiello. “This allows us to drive profitable growth in a rapidly transforming marketplace for games.”
A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 25.5%.
For three consecutive quarters, the company has topped analyst estimates. It beat the mark by 3 cents in the fourth quarter of the last fiscal year and by 7 cents in the third quarter of the last fiscal year.
Cost of sales dropped to $205 million, down 14.6% from the year-earlier quarter. Last quarter, cost of sales was 21.5% of revenue versus 24% a year earlier.
Looking Forward: Analysts seem more negative about the company’s results for the next quarter than two months ago. The average estimate for the second quarter has moved from a loss of 42 cents a share to a loss of 44 cents over the last sixty days. At 45 cents per share, the average estimate for the fiscal year has fallen from 48 cents ninety days ago.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
Don’t Miss These Additional Hot Stories: