Electronic Arts Doesn’t Have a Bright Outlook for the Holiday Season
Video-game publisher Electronic Arts’s revenue forecast for the key holiday-shopping quarter was slightly below analysts’ estimates, amid expectations of heavy competition from other games releasing around the same time.
EA forecast adjusted revenue of about $2.04 billion for the current quarter, at the start of which it launched the highly anticipated Battlefield 1 and Titanfall 2 shooter games.
Analysts on average were expecting revenue of $2.08 billion, according to Thomson Reuters (TRI).
EA’s (EA) shares fell 3.5% to $75.10 in extended trading on Tuesday.
Activision Blizzard’s (ATVI) Call of Duty: Infinite Warfare and Ubisoft Entertainment (UBI-SOFT) Watch Dogs 2 have not launched yet, but are expected to launch this quarter.
That may prompt EA to be conservative with its outlook, Wedbush Securities analyst Michael Pachter said in a pre-earnings note.
EA’s adjusted revenue was $1.10 billion in the second quarter ended Sept. 30. Analysts on average were expecting $1.09 billion.
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FIFA 17, the newest version of EA’s top-selling soccer franchise, debuted at the end of September, towards the end of the second quarter, pushing about $75 million in digital revenue to the third quarter.
Sales from EA’s digital business rose 12.7% to about $566 million in the second quarter.
The company said its loss for the period narrowed to $38 million, or 13 cents per share, from $140 million, or 45 cents per share, a year earlier.
Starting from the latest quarter, EA has stopped reporting non-GAAP measures that adjust for deferred revenue, as it has done since fiscal 2008, to comply with stricter guidelines by the U.S. Securities and Exchange Commission.
