Electronic Arts Earnings: Here’s Why Investors Are Mixed

Electronic Arts Inc. (NASDAQ:EA) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are flat.

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Electronic Arts Inc. Earnings Cheat Sheet

Results: Net loss of $45 million (net loss of 15 cents per diluted share) in the quarter versus a net loss of $205 million in the year-earlier quarter.

Revenue: Decreased 13.1% to $922 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Electronic Arts Inc. reported adjusted net income of 56 cents per share. By that measure, the company beat the mean analyst estimate of $0.56. It missed the average revenue estimate of $1.29 billion.

Quoting Management: “Despite a challenging quarter, we were able to deliver non-GAAP EPS at the high end of our guidance range,” said Chief Executive Officer John Riccitiello…

…We are investing for the future wave of growth that we foresee in digital and console.”

Key Stats:

Revenue increased 29.68% from $711 million in the previous quarter. Net income increased to $176 million in the quarter versus a net loss of $381 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.69 to a profit $0.71. For the current year, the average estimate has moved down from a profit of $1.04 to a profit of $1.01 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)