Categories AlphaGraphs, Earnings, LATEST, Technology

Electronic Arts Q1 profit dips; stock falls on weak guidance

Earnings of video game publisher Electronic Arts (EA) declined in the first quarter of 2019 when a sharp fall in product sales more than offset higher digital revenues. Despite the results beating analysts’ estimates, the stock dropped sharply after the company’s unimpressive guidance triggered a sell-off.

First-quarter net income was $293 million or $0.95 per share, compared to $644 million or $2.06 per share in the same period last year. However, the bottom-line came in above Wall Street estimates.

Electronic Arts (EA) first quarter 2019 earnings
Electronic Arts Q1 2019 Earnings Infographic

Revenues fell 22% annually to $1.14 billion, hurt mainly by a sharp decrease in packaged goods and other net revenue. Analysts had predicted a faster decline. Meanwhile, digital net revenue advanced 9% to $957 million, reflecting the management’s aggressive online push.

Net bookings, a key metric to measure the sales performance, dropped 3.4 % to $749 million during the quarter, when more than 48 million players participated in the updated version of the popular FIFA World Cup franchise. Digital net bookings were higher by 2% compared to last year.

The stock dropped sharply after the company’s unimpressive guidance triggered a sell-off

During the quarter, the Redwood City, California based gaming software company repurchased 2.3 million shares for about $300 million.

“We have a strong slate of products to launch through the rest of the fiscal year, great content coming in our live services, and are continuing to grow our esports competitions,” said Electronic Arts CFO Blake Jorgensen.

RELATED: Electronic Art launches at expo

For fiscal 2019, the company expects revenues of $5.6 billion and earnings of $1.108 billion or $3.55 per share. Full-year net bookings are expected to be about $5.55 billion. For the second quarter, it is looking for net profit of $150 million or $0.48 per share on revenues of $1.27 billion.

RELATED: Electronic Arts Q1 2019 earnings call transcript

Take-Two Interactive (TTWO) and Activision Blizzard (ATVI), the other leading video game makers, are expected announce results for their most recent quarter on August 2 after the closing bell.

Last week, Electronic Arts shares hit an all-time high after gaining progressively since the beginning of the year. The stock traded lower during Thursday’s regular session, and fell about 7% after the earnings announcement.

RELATED: Electronic Arts Q4 earnings beat view

Most Popular

HPE Earnings: Hewlett Packard Q1 2024 profit drops but beats Street view

Information technology solutions provider Hewlett Packard Enterprise (NYSE: HPE) on Thursday reported lower earnings and revenues for the first quarter of 2024. Earnings, however, exceeded analysts’ forecasts. First-quarter profit, excluding

After entering FY24 on a high note, Costco is all set to report Q2 results

Costco Wholesale Corporation (NASDAQ: COST) stands out in the retail space for its unique business model that enables the warehouse behemoth to grow store traffic and market share constantly. Currently,

Hormel (HRL) expects continued momentum from its foodservice business in FY2024

Shares of Hormel Foods Corporation (NYSE: HRL) soared over 13% on Thursday after the company delivered better-than-expected earnings results for the first quarter of 2024 and reaffirmed its outlook for

Add Comment
Viewing Highlight