Electronic Arts Beats Estimates But Has a Big Earnings Drop
Electronic Arts (NAS: EA) reported earnings on Jan. 30. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Electronic Arts missed estimates on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP loss per share dropped.
Margins grew across the board.
Electronic Arts logged revenue of $1.18 billion. The 23 analysts polled by S&P Capital IQ expected a top line of $1.29 billion on the same basis. GAAP reported sales were 13% lower than the prior-year quarter's $1.06 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.57. The 24 earnings estimates compiled by S&P Capital IQ predicted $0.56 per share. GAAP EPS were -$0.15 for Q3 compared to -$0.62 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.5%, 550 basis points better than the prior-year quarter. Operating margin was -8.9%, 940 basis points better than the prior-year quarter. Net margin was -4.9%, 1,440 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.22 billion. On the bottom line, the average EPS estimate is $0.72.
Next year's average estimate for revenue is $4.07 billion. The average EPS estimate is $1.02.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 1,952 members out of 2,228 rating the stock outperform, and 276 members rating it underperform. Among 560 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 485 give Electronic Arts a green thumbs-up, and 75 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Electronic Arts is hold, with an average price target of $16.10.
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