Electronic Arts Inc. raised its earnings outlook for the second time in as many quarters as Wall Street and videogame players alike await the release of the company’s potential blockbuster: “Star Wars Battlefront”.
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The company recorded a $140m loss, compared with $3m income a year ago.
For the third quarter, the company forecast net revenue of about US$1.78 billion and profit of about US$1.75 per share on an adjusted basis.
Earlier in the day, EA’s stock price fell a bit.
Still, shares fell 1.8% after hours on top of sliding almost 1% to $76.06 in 4 p.m. trading in New York.
The driver of the success was massive interest in EA’s online activities, with monthly average users of the Federation Internationale de Football Association and Madden series up 30 per cent year-on-year.
News and ongoing updates regarding EA and our games are available on EA’s blog at www.ea.com/news. “Our EA SPORTS titles are connecting millions of passionate fans around the world to each other and the sports they love, we have new mobile experiences for our players, and deeply-engaged communities in our live services”, said Chief Executive Officer Andrew Wilson. And with the upcoming Star Wars Battlefront game arriving on November, expect a large spike on the players in their multiplayer servers, as their open beta has attracted more than 9.5 million players, which is the biggest beta test in EA’s history.
In reporting fiscal second-quarter results that shrank from a year earlier, EA beat a familiar path. The videogame giant nodded to strong digital operations as it topped Wall Street’s forecast, and it elevated its own full-year outlook for revenue and profit.
The average estimate among 85 Estimize users was for earnings of $0.49 per share on revenue of $1.11 billion.
But with sales of these three titles now ramping down, all eyes at EA turn to Star Wars Battlefront and Need For Speed to maintain momentum for the rest of their fiscal year (now that Mirror’s Edge Catalyst has been pushed out of it).
EA now expects adjusted earnings of about $3.00 per share and adjusted revenues of $4.50 billion for 2015. On its conference call, EA said the delay of “Mirror’s Edge Catalyst” to May would take an expected $70 million in full-year revenue with it.
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Shares were down slightly after the results, and Wedbush Securities analyst Michael Pachter attributed the disappointment to the “implied” fourth-quarter profit estimate of 45 cents per share.
