Electronic Arts Scores With Higher Than Expected Revenue
Electronic Arts beat first-quarter revenue estimates as demand rose for its popular titles including “Battlefield 1” and “The Sims,” but forecast current-quarter revenue slightly below expectations.
Shares of the company, which maintained its full-year revenue and profit estimates, were down 3.9% at $113 in after the bell on Thursday. They hit a record high of $120.25 in regular trading.
EA expects second-quarter adjusted revenue of $1.16 billion, just shy of analysts’ average estimate of $1.18 billion, according to Thomson Reuters I/B/E/S.
“FIFA 18,” the latest version of EA’s popular soccer franchise, is scheduled for release on Sept. 29, and football game “Madden NFL 18” on Aug. 25.
The company’s adjusted revenue was $775 million in the first quarter ended June 30, above analysts’ average estimate of $768.5 million.
“This quarter typically represents 15% of our full year… Prudence would argue that you shouldn’t change your whole year based on 15% performance in one quarter,” Chief Financial Officer Blake Jorgensen told Reuters.
“In my time here, I think we have only changed guidance coming out of the first quarter only once in five years,” Jorgensen added.
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The company’s other big launches for the year are in the third quarter, when EA is expected to release its highly anticipated “Star Wars Battlefront II” and “Need for Speed Payback.”
Sales in EA’s high-margin digital business rose 27.6% to $879 million in the first quarter as more players pivot to buying and downloading games online and away from purchasing physical copies at retail stores.
“Battlefield 1,” launched in October, had more than 21 million players joining the game at the end of the first quarter, the company said.
EA’s (EA) revenue rose to $1.45 billion from $1.27 billion a year earlier.
The company released its action role-playing videogame “Mass Effect: Andromeda” toward the end of its fourth quarter, but ended up deferring about $53 million in “Andromeda” sales into the first quarter because of the game’s deluxe editions.
Videogame companies are required to defer some revenue from certain online-enabled games following a tweak to the U.S. accounting rules.
EA’s net income rose to $644 million, or $2.06 per share from $440 million, or $1.40 per share.
The company’s shares had risen nearly 50% this year through Thursday’s close.