News and Analytical survey

Electronic Arts Falls After Outlook Misses Analyst Estimates

The shares tumbled to $64.14 in late trading and dropped as low as $61.27 after the company released third-quarter earnings and its outlook for the final three months of the year ending in March.

Electronic Arts has exceeded its own earnings guidance for the past 10 quarters. One challenge the company is confronting is the strong dollar. Excluding those effects, the company’s live services unit posted a 22% gain in revenue from titles like FIFA, Madden NFL and Hockey Ultimate Team in the period just ended. The strong dollar trimmed that gain to 13%.

- Earnings excluding some items this quarter will be about 40 cents a share, compared with the 50-cent average of analysts’ estimates.
- Adjusted revenue will be approximately $875 million versus Wall Street projections of $917.6 million.

Electronic Arts, based in Redwood City, California, posted third-quarter profit that beat analysts’ estimates as sales of the new title Star Wars Battlefront exceeded company projections. Profit excluding some items rose to $596 million, or $1.83 a share, the company said Thursday in a statement. That beat the $1.81 average of analysts’ estimates compiled by Bloomberg. Adjusted revenue gained 26% to $1.8 billion in the period ended December 31, compared with estimates of $1.81 billion.

Star Wars Battlefront, riding on the popularity of the movie, helped deliver the record holiday results, with sales exceeding 13 million copies. Sales of popular sports titles like FIFA, Madden NFL and Hockey Ultimate Team live services increased 13%. The net loss for fiscal third quarter was $45 million, or 14 cents a share, compared with profit of $142 million, or 44 cents, a year earlier. Revenue, excluding adjustments fell 5% to $1.08 billion.

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