Earnings of video game maker Electronic Arts (EA) rose sharply in the fourth quarter as broad-based market share expansion lifted revenues. The results surpassed analysts’ expectations, driving the stock up more than 2% in the after-hours.
The Redwood City, California-based company said its earnings moved up 7.7% annually to $1.95 per share in the three months ended March 2018. Net income increased to $607 million from $566 million last year. Revenues advanced 3.6% year-over-year to $1.58 billion, while net bookings jumped 15% to $1.26 billion.
“In the year ahead, we will expand the world of play with amazing new experiences and new IP, more competition, and industry-leading subscription programs. There has never been a more exciting time to be engaging and entertaining global communities,” said Electronic Arts CEO Andrew Wilson.
In recent years, the company has achieved faster margin and earnings growth by implementing cost-cutting measures effectively, despite the persistent drag on profitability from mounting competition.
During fiscal 2018, Electronic Arts repurchased 5.3 million shares for $601 million, and announced a new two-year program to repurchase up to $2.4 billion of its shares.
Looking ahead, the makers of The Sims and FIFA 18 expects net revenues of about $1.08 billion for the first quarter of 2019. Net income and EPS are forecast to be $200 million and $0.64 per share for the quarter. The company is looking for net bookings of around $720 million.
In the whole of fiscal 2019, revenues are expected to be approx $5.6 billion and net bookings around $5.55 billion. Full-year profit is estimated to be $1.108 billion or $3.55 per share.
Activision Blizzard (ATVI), which competes with Electronic Arts, recently posted an increase in first-quarter earnings and revenues. Take-Two (TTWO) Interactive is scheduled to report its fourth-quarter results on May 16.
Shares of Electronic Arts, which gained more than 10% since the beginning of 2018, ended Tuesday’s regular session broadly flat.