EA Revenue, Outlook Top Forecasts; Shares Jump
Electronic Arts reported fourth-quarter earnings Tuesday that fell short of analyst expectations but revenue and its outlook topped forecasts.
Shares shot up more than 8 percent after-hours. What's the stock doing now? (Click here for the latest after-hours quote.)
Electronic Arts, which, like the rest of the industry is struggling as players migrate to more casual games such as Angry Birds on mobile devices, estimated fiscal 2014 profit excluding items of $1.20 a share, beating an average estimate of $1.10. That was due in part to cost-cutting measures and an acceleration in higher-margin digital sales.
EA has been cutting staff and reorganizing studios in recent months to embrace new game platforms, cut costs and adapt to tougher market conditions. The publisher is preparing to adopt the next-generation videogame console technology in its games.
Net income fell to $323 million, or $1.05 a share, from $400 million, or $1.20 a share, a year earlier.
Excluding items, earnings rose to 55 cents per share from 17 cents a share in the year-earlier period.
Revenue improved 6 percent to $1.04 billion from $977 million a year ago.
Analysts had expected the company to report earnings excluding items of 57 cents a share on $1.03 billion in revenue, according to a consensus estimate from Thomson Reuters.
EA's popular franchises include "Madden NFL," "The Sims" and "Medal of Honor." It sealed a multi-year licensing deal with Walt Disney on Monday to make video games based on the "Star Wars" movies. Financial terms were not disclosed.
"Our agreement unlocks a whole new future of 'Star Wars' games that will span consoles, PCs, tablets, mobile, and more," EA President of Labels Frank Gibeau said in a press release.
For fiscal 2014, the videogame maker forecast revenue of $4 billion, above the $3.79 billion analysts currently expect.