Electronic Arts Shares Down 8% Following Q4 Results
Electronic Arts Inc. (NASDAQ:EA) shares rose around 8% on Wednesday following the company’s reported Q4 results, with EPS of $0.80 coming in worse than the consensus estimate of $1.44.
Net bookings were $1.75 billion, compared to the consensus estimate of $1.78 billion. Total net bookings grew 18% year-over-year driven by 43% growth in full game sales and 14% growth in live services. Net bookings from Mobile platforms were up 66% year-over-year due to acquired mobile studios. Live services net bookings were 88% of total digital in Q4/22, down from 89% in Q4/21.
Looking ahead, management points to higher taxes and higher costs associated with initial mobile game launches in the 2023 outlook, which explains why profit guidance fell below consensus. Overall, the 2023 launch slate is relatively lean and without contribution from Battlefield Mobile.
Analysts at Oppenheimer continue to expect net bookings/earnings growth to accelerate in the 24 months, but with more conservative margin assumptions due to the unfavorable near-term macro setup. The analysts lowered their price target on the company’s shares to $160 from $170, while maintaining outperform rating.
| Symbol | Price | %chg |
|---|---|---|
| 259960.KS | 340500 | 1.76 |
| 7974.T | 8019 | 0.31 |
| 251270.KS | 56000 | -4.46 |
| 036570.KS | 193100 | 1.66 |
Electronic Arts Downgraded to Hold at Deutsche Bank
Deutsche Bank analysts downgraded Electronic Arts Inc. (NASDAQ:EA) to Hold from Buy and lowered their price target on the stock to $125 from $157 amid slower growth and strategic reset.
The downgrade is due to a negative impact on EA's fundamental outlook caused by various factors. These factors include greater macro-related challenges, a reset of EA's mobile strategy, and less new content than previously anticipated for next year.
As a result, the analysts are forecasting lower levels of growth for 2023-2025 compared to previous expectations. EA's initial guidance for 2024 also calls for mid-single-digit topline growth, which is lower than the prior forecast and Street estimate at that time. This implies that EA's net bookings will be around $7.5 billion, which compares to the Street estimate of $8.2 billion.
Electronic Arts Downgraded to Hold at Deutsche Bank
Deutsche Bank analysts downgraded Electronic Arts Inc. (NASDAQ:EA) to Hold from Buy and lowered their price target on the stock to $125 from $157 amid slower growth and strategic reset.
The downgrade is due to a negative impact on EA's fundamental outlook caused by various factors. These factors include greater macro-related challenges, a reset of EA's mobile strategy, and less new content than previously anticipated for next year.
As a result, the analysts are forecasting lower levels of growth for 2023-2025 compared to previous expectations. EA's initial guidance for 2024 also calls for mid-single-digit topline growth, which is lower than the prior forecast and Street estimate at that time. This implies that EA's net bookings will be around $7.5 billion, which compares to the Street estimate of $8.2 billion.
Electronic Arts Reports Q2 Miss, Lowers Outlook
Electronic Arts (NASDAQ:EA) reported its Q2 results, with EPS of $1.07 coming in worse than the Street estimate of $1.36. Net bookings were $1.75 billion, worse than the Street estimate of $1.81 billion.
For Q3/23, the company anticipates net bookings to be in the range of $2.425-2.525 billion, compared to the Street estimate of $2.6 billion. For the full 2023 year, the company lowered its net bookings guidance to a range of $7.65-7.85 billion, compared to the Street estimate of $7.97 billion. Full-year guidance cut is attributed to FX. The cut is well within investor expectations given the well-understood FX movements and weakness in mobile gaming.
The company's sports franchises were highlights of the quarter. Both delivered record-breaking metrics: FIFA had its biggest launch on console/PC in the franchise's history with 6% growth in FUT (FIFA Ultimate Team) players; Madden UT and net bookings are both up double-digits.
Electronic Arts Shares Up 3% on Q1 Beat, Provides 2023 Guidance
Electronic Arts Inc. (NASDAQ:EA) shares closed more than 3% higher today following the company’s reported Q1 results, with EPS of $1.11 coming in better than the Street estimate of $0.33. Net bookings came in at $1.3 billion, compared to the consensus estimate of $1.26 billion.
Total net bookings declined 3% year-over-year due to one game launch in Q1 versus two a year ago, but partially offset by FIFA's strength, the Playdemic acquisition, and the launch of Apex Legends Mobile. Live Services grew 8% year-over-year and accounted for 73% of TTM Net Bookings.
The company maintained its full 2023-year net bookings/non-GAAP EPS targets despite incrementally stronger FX headwinds for the remaining three quarters of 2023. The company expects 2023 net bookings in the range of $7.9-8.1 billion, compared to the Street estimate of $7.99 billion.
Electronic Arts Completed its Acquisition of Playdemic for $1.4 billion in Cash
Electronic Arts Inc. (NASDAQ:EA) announced today the completion of its acquisition of Playdemic, a Manchester-based mobile games studio best known for its hit title Golf Clash, for $1.4 billion in cash.
Playdemic marks the company’s third major acquisition in recent months, following Codemasters, acquired in an all-cash deal with an implied enterprise value of $1.2 billion, and Glu Mobile for $2.1 billion in enterprise value.
The acquisition of Playdemic is expected to yield considerable synergies for EA, including a more extensive mobile and sports-rich product portfolio, an increased gaming footprint within Europe, and enhanced live service capabilities.
Taking into account the above-mentioned benefits for the company, analysts at Wedbush raised their estimates for 2022 from $6,164 million to $6,264 million for net bookings and from $5.95 to $6.11 for EPS. For 2023 the brokerage expects net bookings of $7,900 million (vs. prior $7,700 million) and EPS of $7.45 (vs. prior $7.25).
The analysts at Wedbush increased their price target on the company’s shares to $200 from $194, reiterating their outperform rating.
