Electronic Arts (EA) Q3 Earnings And Revenues Increase Y/Y
Zacks Investment Research | Feb 05, 2019 09:18PM ET
Electronic Arts (NASDAQ:EA) reported third-quarter fiscal 2019 earnings of 86 cents per share against loss of 60 cents per share in the year-ago quarter. The bottom-line improvement was driven by robust performance of FIFA franchise and The Sims franchise.
The Zacks Consensus Estimate was pegged at $1.93.
Revenues increased 11.1% year over year to $1.29 billion but lagged the guided figure of $1.38 billion.
Net bookings declined 18.4% year over year to $1.6 billion. Digital net bookings were $1.2 million in the third quarter, down 3% year over year.
Delay in the launch of Battlefield V coupled with the absence of Battle Royale mode adversely affected EA’s top line. Management stated that Battlefield 1 has 4 million monthly active users (MAU) while Battlefield 4 has 2 million. The company will be rolling out Battle Royale mode for Battlefield V in March.
Moreover, the company also witnessed sluggish growth of Command & Conquer: Rivals, which resulted in a decline in net bookings year over year.
Quarter Details
EA’s digital revenues (70.4% of revenues) increased 16.4% to $908 million. Notably, 47% of sales made by the company, in the past one year, were through digital channels. Revenues from EA’s Packaging goods and other segment (29.6% of revenues) stayed flat at $381 million.
Further segregating digital revenues, full game download revenues (19.2% of total revenues) increased 72.7% to $247 million.
Revenues from Live services (37.2%) were up 0.8% to $480 million. Live services net bookings were $784 million, down 0.4% year over year. The company witnessed year-over-year increase in monthly active players for The Sims 4. Additionally, the franchise crossed $1 billion in lifetime revenues. Its user base expanded 4.8 million in the past year.
FIFA Ultimate Team was up 6% year over year, an all-time high due to the addition of e-sports. However, the growth in FIFA Ultimate Team was inadequate to offset the decline in Battlefield 1 live services and FIFA Online in Asia.
EA mobile games revenues (14%) jumped 12.4% year over year to $181 million. Net bookings decreased 22% year over year to $142 million due to unfavorable changes made in Madden Mobile, which resulted in a decline in monetization. Further, the underperformance of Command & Conquer: Rivals is a concern. The company is witnessing slow growth in Asian markets and the transition to FIFA Online 4 has been slower than anticipated, which is affecting EA’s top line.
On the basis of platforms, revenues from console (68.7% of revenues) increased 9.3% to $885 million and revenues from mobile platform (14%) increased 9% to $181 million. Revenues from PC (16.8% of revenues) increased 20% to $217 million.
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EA stated that it witnessed an addition of four million new players to FIFA franchise through consoles and PC. Notably, FIFA 19 was the best-selling console game in Europe last calendar year.
Electronic Arts Inc. Price, Consensus and EPS Surprise
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