Electronic Arts Inc. Shares Drop After Revenue Forecast

Shares of Electronic Arts Inc. (EA) experienced a decline in the extended session on Tuesday, as the video game publisher's revenue forecast for the current quarter did not meet the expectations of Wall Street analysts.

Share Performance

After a 0.1% slip during regular trading hours, EA shares fell over 3% after the market closed. The stock closed at $136.12, showing an increase of 11.4% year to date. In comparison, the tech-heavy Nasdaq Composite Index rose by 36.5%, and the S&P 500 index advanced by 19.5%.

Second-Quarter Forecast

EA projected second-quarter earnings in the range of 72 cents to 89 cents per share, with revenue expected to be between $1.83 billion and $1.93 billion. Additionally, bookings are anticipated to range from $1.7 billion to $1.8 billion.

Outlook for 2024

Regarding the fiscal year 2024, the company forecasts net revenue and bookings between $7.3 billion and $7.7 billion, while earnings are projected to range from $3.42 to $3.92 per share, without any adjusted figures provided.

Analyst Estimates

Analysts have estimated that second-quarter earnings will be around $1.50 per share, with revenue expected to reach $1.95 billion and bookings projected at $1.82 billion. For the entire year, analysts forecast earnings of $6.87 per share, revenue of $7.63 billion, and bookings of $7.6 billion.

Fiscal First-Quarter Results

In the fiscal first quarter, Electronic Arts reported a net income of $402 million, or $1.47 per share. This represents an increase from the $311 million, or $1.11 per share, achieved in the same period last year. The company did not specify an adjusted per-share figure.

Revenue and Bookings

During this quarter, revenue rose to $1.92 billion, up from $1.79 billion in the previous year's quarter. Net bookings, which include deferred revenue, amounted to $1.58 billion.

Analysts' Expectations vs. EA's Forecasts

Analysts had initially predicted unadjusted earnings of $1.10 per share and adjusted earnings of $1.02 per share. They also estimated revenue to be $1.92 billion, with bookings of $1.9 billion. EA's own forecast projected unadjusted earnings in the range of 98 cents to $1.14 per share, along with net revenue between $1.83 billion and $1.93 billion. Net bookings were expected to be between $1.5 billion and $1.6 billion.