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For the First Time in a Long Time EA a 'Buy': Adami

Monday, 7 May 2012 | 5:40 PM ET

“We haven’t seen these levels since 1999,” says trader Guy Adami. For the first time in a long time I think Electronic Arts is interesting.

That was Adami’s knee-jerk reaction, after shares slipped 7% down to $14 in extended trade after Electronic Arts disappointed the Street with its guidance.

Looking at the numbers, Electronic Arts now expects EPS to be in the range of $1.05 to $1.20 per share for the year on revenue of $4.3 billion. Analysts on average are expecting EPS of $1.12 a share on revenue of $4.49 million, according to Thomson Reuters.

“If the stock troughs on Tuesday on big volume, I’d pull the trigger,” Adami says.

Trader Jon Najarian says much the same.

He suggests watching the options market for a tell. “If the June and July 15 and 16 calls are extremely active, I’d also look at this stock.”

Oil's Trade & EA's Earnings Results
The Fast Money crew weighs in on the sell-off in energy and how to trade it. Also, CNBC's Julia Boorstin reports the latest details on Electronic Arts' numbers from the company's conference call.

Both pros say Electronic Arts is often rumored to be a takeover target and with the stock declining so much, a potential suitor may come forward.

Electronic Arts posted total revenue of $1.37 billion, compared with $1.09 billion a year ago for the three months ended March 31.

Its net income rose to $400 million, or $1.20 per share, compared with $151 million, or 45 cents per share a year ago. Its futuristic game, "Mass Effect 3" helped drive sales, the company said.

However, Electronic Arts' lost 400,000 subscribers of "Star Wars: The Old Republic."

EA had poured more money and firepower into "Star Wars: The Old Republic" than any other game in its 30-year history.



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Trader disclosure: On May 7, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is short AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long NFLX; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long HPQ; Karen Finerman is long DIS; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDX; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Steve Grasso is long ASTM; Steve Grasso is long AVAV; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long NUAN; Steve Grasso is long MO; Jon Najarian is long MAKO; Jon Najarian is long RAX; Jon Najarian is long WYNN; Jon Najarian is long call spreads AAPL; Jon Najarian is long call spreads CIEN; Jon Najarian is long call spreads GS; Jon Najarian is long call spreads FFIV; Jon Najarian is long call spreads FIO; Jon Najarian is long call spreads NFLX; Jon Najarian is long call spreads AH; Jon Najarian is long call CIGX; Jon Najarian is long call CBOE; Jon Najarian is long call CME ; Jon Najarian is long call DDMG; Scott Nations is long SPY; Scott Nations is long C; Scott Nations is long BAC; Scott Nations is long HSII

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  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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