Electronic Arts Says Revenue Up, Raises Outlook
November 01 2016 - 7:00PM
Dow Jones News
Electronic Arts Inc. reported a jump in quarterly revenue and
nudged up its full-year outlook for revenue and profit, saying it
anticipates other videogame publishers will issue fewer competing
titles this holiday season.
Electronic Arts said Tuesday revenue rose 10% to $898 million in
the quarter that ended Sept. 30, driven by the strength of its
sports and mobile titles. The No. 2 U.S. game publisher by market
value after Activision Blizzard Inc. said its net loss narrowed to
13 cents per share compared with a loss of 45 cents a year ago.
Electronic Arts said it expects robust holiday sales for its new
shooter games "Battlefield 1" and "Titanfall 2," and a less crowded
videogame market without new installments of franchises that came
out last year around this time such as Ubisoft Entertainment SA's
"Assassin's Creed Syndicate" and Bethesda Softworks LLC's "Fallout
4."
That outlook caused it to nudge up its forecast for the fiscal
year that ends March 31 to revenue of $4.775 billion from an
earlier forecast of $4.750 billion, and to net income of $848
million, or 4.8% more than it had expected previously.
"We're very optimistic about the business in general," said
Chief Financial Officer Blake Jorgensen.
Shares of Electronic Arts fell 2.7% in after-hours trading
Tuesday following the quarterly results, but were recently up 6.6%.
The shares had dipped recently, but were up 17.8% this year through
Tuesday's market close.
Many analysts who follow videogame companies track financial
measures adjusted for factors such as deferred sales of online
services. Electronic Arts this quarter stopped reporting those
measures, after U.S. Securities and Exchange Commission pressed
companies to hew to U.S. generally accepted accounting
principles.
Based on the Electronic Arts' results statement, however, its
adjusted revenue in the latest quarter fell 4.5% to $1.1 billion.
That compared with analysts' estimates of $1.09 billion, according
to Thomson Reuters. Adjusted profit rose to 53 cents a share,
according to the data, compared with estimates of 43 cents a share,
and with a loss of 7 cents a year ago.
Mr. Jorgensen attributed strength in the company's sports titles
to an improved "FIFA," its top-selling franchise. The latest game
was the first in the series made using its Frostbite software, and
features a new option to control a fictional athlete's career off
the field. New content released for mobile games—namely "Star Wars:
Galaxy of Heroes" and "Madden NFL Mobile"-- also has helped keep
players engaged, according to Mr. Jorgensen.
The current quarter will be the company's largest cash-flow
quarter in history, he said, because of the strength of its shooter
franchises—even though Activision Blizzard is planning later this
week to release a new installment of the shooter "Call of Duty,"
last year's top-selling videogame in the U.S., according to NPD
Group.
"We've always felt the third quarter is the best time to ship a
shooter game," said Mr. Jorgensen. "There's a huge market between
now and the end of year."
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
November 01, 2016 18:45 ET (22:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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