Electronic Arts released their earnings yesterday for the second fiscal quarter, beating expectations yet their stock price declined in afterhours trading.
After the close of trading yesterday, Electronic Arts released their earnings for the second fiscal quarter ended 30 September. The positive results where thanks to the sales of FIFA as well as mobile games.
The American video game company reported earnings per share of 70 cents on revenue of $1.1 billion, beating analysts’ expectations for earnings of 43 cents a share on revenue of $1.09 billion. Also, the quarterly net revenue was $898 million, of which 63% was digital. The positive results were boosted as a result of the release of FIFA Mobile as well as the continued success if the company’s Star Wars console and mobile titles.
Electronic Arts is also expecting to have a profitable fiscal Q3 as a result of new releases in October – on the 21st of October, Battlefield 1 was released and then on the 28th of October, Titanfall 2 was released. While these titles are extremely popular, they do face some stiff competition from the likes of Call of Duty: Infinite Warfare. As Andrew Wilson, the EA CEO explained, “We are in an outstanding position for the quarter ahead, with two of the highest-rated games of this console generation in Battlefield 1 and Titanfall 2, global competitive gaming tournaments underway, and our first virtual reality experiences coming soon. Across all platforms, this holiday season will be a fantastic time to play.”
In addition, the gaming company stated that the total player base for the first week after the release of Battlefield 1 was nearly double the numbers of the start of Battlefield 4, which was one of Electronic Art’s record-breaking games.
The net sales for the second quarter also exceeded expectations as a result of top performance in FIFA Mobile as well as a much stronger year-on-year growth in mobile. As a result, Blake Jorgensen, the EA CFO stated that the would be raising their annual guidance based on FIFA 17’s strong performance as well as the upcoming holiday season.
In the first week of the release of FIFA 17, 20% more players engaged in the game compared to the first week of the release of FIFA 16, which was released last year. In addition, almost 75% of all FIFA 17 players have engaged in “The Journey” story mode. For the trailing 12 months, compared to last year, the net sales from FIFA, Hockey Ultimate Team and Madden NFL are collectively up 15%.
To top it off, the EA FIFA Mobile app reached the number one spot on the free game App Store chart in over 130 countries. According to Sensor Tower, a measurement firm, Star Wars: Galaxy of Heroes has had over 30 million downloads in 11 months and has generated nearly $100 million in revenue, while Titanfall 2 has been rated 90, or above, by more than 40 top outlets worldwide.
Despite reporting top earnings, the Electronic Arts stock fell 2.7% in after-hours trading to trade at $75.75 a share. Since then, it has rebounded, moving up 3.4% and it is now trading at $77.84 a share. The current market value of EA is $23.4 billion. With the release of popular new titles, and the holiday season just around the corner, it seems EA will continue to appeal to investors.