What to Expect from Electronic Arts

Seth Jayson, The Motley Fool
Updated

Electronic Arts (NAS: EA) is expected to report Q1 earnings on July 23. Here's what Wall Street wants to see:

The 10-second takeaway
 Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Electronic Arts's revenues will wane -7.5% and EPS will remain in the red.

The average estimate for revenue is $454.3 million. On the bottom line, the average EPS estimate is -$0.60.


Revenue details
 Last quarter, Electronic Arts recorded revenue of $1.04 billion. GAAP reported sales were 12% lower than the prior-year quarter's $1.37 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 Last quarter, non-GAAP EPS came in at $0.55. GAAP EPS of $1.05 for Q4 were 13% lower than the prior-year quarter's $1.21 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
 For the preceding quarter, gross margin was 77.3%, 380 basis points better than the prior-year quarter. Operating margin was 28.9%, 80 basis points worse than the prior-year quarter. Net margin was 26.7%, 250 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $4.00 billion. The average EPS estimate is $1.21.

Investor sentiment
 The stock has a two-star rating (out of five) at Motley Fool CAPS, with 1,931 members out of 2,218 rating the stock outperform, and 287 members rating it underperform. Among 565 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 496 give Electronic Arts a green thumbs-up, and 69 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Electronic Arts is outperform, with an average price target of $18.81.

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The article What to Expect from Electronic Arts originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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