Electronic Arts Inc. (NASDAQ: EA) reported a 32% jump in earnings for the third quarter of fiscal 2020 helped by higher revenue. Despite the results missing analysts’ expectations, the game developer guided fourth-quarter earnings and revenue above the consensus estimates.
Net income soared by 32% to $346 million or $1.18 per share. Revenue climbed by 24% to $1.59 billion. Analysts had expected EPS of $2.51 on revenue of $1.97 billion for the third quarter. Net bookings jumped by 23% to $1.98 billion.
Looking ahead into the fourth quarter, the company expects revenue of about $1.325 billion, net bookings of about $1.152 billion, and earnings of $1.05 per share. Analysts expect EPS of $0.97 on revenue of $1.2 billion for the fourth quarter.
For the full year 2020, EA lifted revenue outlook to about $5.475 billion from $5.41 billion and its EPS guidance to about $9.90 from the previous estimate of about $9.57. Net bookings outlook is raised to about $5.15 billion from the prior forecast of about $5.1 billion.
The company expects live services to continue to drive growth in fiscal 2021 and for growth to accelerate in fiscal 2022, led by a new Battlefield. Electronic Arts said its broad-based business model lowers its dependence on individual titles and deliver financial results by providing a constant stream of high-quality entertainment for players.
Digital net bookings for the trailing twelve months was $4.128 billion, up 15% year-over-year and now represents 77% of total net bookings. During the quarter, EA launched Plants vs. Zombies: Battle for Neighborville, Need for Speed Heat and Star Wars Jedi: Fallen Order.
FIFA Ultimate Team matches were up nearly 40% year-over-year from launch through Q3. During the quarter, The Sims 4 surpassed 20 million unique players worldwide life-to-date. Full game downloads increased by 16% and live services jumped by 41% while mobile revenue fell by 11%.
By platform, revenue from console jumped by 31% year-over-year for the third quarter and that from PC/Browser increased by 18%. However, Mobile revenue declined by 7% and other revenue dropped by 33%.
In the gaming industry, EA is the first to kick start the earnings season. Both EA’s rivals Activision Blizzard (NASDAQ: ATVI) and Take-Two Interactive Software (NASDAQ: TTWO) are slated to release their earnings results on February 6 after the market closes.
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