雅虎香港財經 Electronic Arts (EA) Up 10.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Electronic Arts (EA). Shares have added about 10.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Electronic Arts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Electronic Arts Q4 Earnings and Revenues Decline Y/Y
Electronic Arts reported fourth-quarter fiscal 2024 earnings of $1.37 per share, which declined 22.6% year over year. Revenues decreased 5.1% year over year to $1.77 billion due to weakness in Live services and other revenues.
The Zacks Consensus Estimate for earnings was pegged at $1.55 per share. The consensus mark for revenues was pinned at $1.78 billion.
Net bookings for the fiscal fourth quarter were $1.67 billion, down 14% year over year in both actual and constant currency.
Full-game net bookings for the quarter were $259 million, driven by slate timing. Live services net bookings were $1.41 billion.
Quarter Details
EA’s full-game revenues (18.7% of total revenues) decreased 10.5% year over year to $333 million. Full-game download revenues decreased 3% year over year to $265 million. Revenues from packaged goods plunged 31% year over year to $68 million.
Live services and other revenues (81.3% of total revenues) decreased 3.7% year over year to $1.44 billion.
Based on platforms, revenues from consoles decreased 4% year over year to $1.04 billion in the reported quarter. Revenues from PC & Other declined 10% year over year to $423 million. Revenues from the mobile platform decreased 3% year over year to $307 million.
Operating Details
EA’s GAAP gross profit declined 0.3% from the year-ago quarter’s levels to $1.42 billion. Gross margin expanded 380 basis points (bps) on a year-over-year basis to 79.9%.
Operating expenses decreased 5% year over year to $1.18 billion. As a percentage of revenues, operating expenses remained flat on a year-over-year basis at 66.8%.
Operating income on a GAAP basis increased 33.7% year over year to $234 million. The operating margin expanded 380 bps year over year to 13.2% in the reported quarter.
Balance Sheet and Cash Flow
As of Mar 31, 2024, EA had $3.2 billion in cash and short-term investments compared with $3.1 billion as of Dec 31, 2023.
For the trailing 12 months, net cash provided by operating activities was $2.315 billion, up 49% year over year.
The board has authorized a new stock repurchase program of $5 billion over three years. During full-year fiscal 2024, EA returned $1.505 billion to stockholders through stock repurchases and dividends.
The company has declared a quarterly cash dividend of 19 cents per share of its common stock. The dividend is payable on Jun 19 to shareholders of record as of the close of business on May 29.
Guidance
For first-quarter fiscal 2025, EA expects GAAP revenues between $1.575 billion and $1.675 billion and earnings per share (EPS) in the range of 73-90 cents. Net bookings are expected between $1.15 billion and $1.25 billion.
For fiscal 2025, EA expects revenues in the range of $7.1-$7.5 billion and earnings in the band of $3.34-$4 per share.
The company expects net bookings for the fiscal year between $7.3 billion and $7.7 billion.
Operating cash flow is estimated in the band of $2.05-$2.25 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -73.29% due to these changes.
VGM Scores
At this time, Electronic Arts has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Electronic Arts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Electronic Arts Inc. (EA) : Free Stock Analysis Report
