Does EA Stand For Errant Assumptions?
Electronic Arts: The Turnaround Is At Hand For This Fallen Angel - Buy On Headline Weakness
David Weinstein • 52 Comments
David Weinstein • 52 Comments
Does EA Stand For Errant Assumptions?
Jul. 30, 2015, 4:28 PM
- Electronic Arts (NASDAQ:EA) is off 4% now in after-hours trade following a strong quarter where it raised full-year guidance and beat expectations on top and bottom lines despite revenues that slipped more than 10% from last year.
- Revenue breakout: Total non-GAAP net revenue of $693M was composed of digital net revenue of $532M (up 10.3%) and packaged goods and other revenue of $161M (down 45%). On a GAAP basis, digital net revenue of $623M and packaged goods and other revenue of $580M came to GAAP revenue of $1.2B, down about 1%.
- Monthly active users averaged more than 150M for the quarter. The company noted that during E3 week, EA titles earned 132 awards and trailers, gameplay and livestreams were viewed more than 53M times.
- The company guided for full fiscal year (ending March 31, 2016) non-GAAP net revenues of $4.45B and EPS of $2.85, up from $2.75. For its fiscal Q2, the company sees revenue of $1.075B (light of an expected $1.12B) and EPS of $0.40 vs. an expected $0.66.
- Conference call to come at 5 p.m. ET.
Jul. 30, 2015, 4:04 PM
- Electronic Arts (NASDAQ:EA): Q1 EPS of $0.15 beats by $0.12.
- Revenue of $693M (-10.6% Y/Y) beats by $40.96M.
- Shares +3%.
Jul. 29, 2015, 5:35 PM
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Jul. 14, 2015, 5:33 PM
- Fresh off an announcement of its own streaming video service, Comcast (CMCSA -0.8%) is beginning a beta test for Xfinity Games, a streaming videogame service it's developing with Electronic Arts (EA -1.8%).
- Considering the payload of streaming a game, the service is focused on older and mobile-oriented versions of games, like FIFA 13, NBA Jam or Plants vs. Zombies -- which makes it more of a competitor with other streaming game offerings rather than with major consoles.
- The simpler nature of the games means it's not set for a specialized controller, so players control the games with mobile phones or tablets.
Jul. 9, 2015, 10:31 AM
- Electronic Arts (NASDAQ:EA) is up 2.2% and setting a new 52-week high, as Piper Jaffray raises its price target to $72.
- Shares closed yesterday at $69; currently they're trading at $70.50.
- Piper's reiterating its Overweight rating on the shares. On Tuesday, shares moved up on a UBS upgrade to Buy, where those analysts raised the target to $80 seeing "continued runway for outperformance."
- Previously: Electronic Arts names new mobile chief (Jul. 07 2015)
- Previously: Electronic Arts up 1.8% premarket on UBS upgrade to Buy (Jul. 07 2015)
Jul. 7, 2015, 4:40 PM
- Electronic Arts (NASDAQ:EA) says it has appointed Samantha Ryan head of EA Mobile.
- Ryan is a recent addition to the company, having joined just a few months ago. Previously she had served as senior VP of production and development at Warner Bros. Interactive.
- In its last earnings report (fiscal Q4), EA noted that mobile revenue set a new record, contributing $524 million for the fiscal year. Monthly active users for mobile titles averaged more than 165M in Q4.
- The company's shares rose 2.7% today and hit an all-time high heading into the close, following this morning's upgrade from UBS to Buy.
Jul. 7, 2015, 9:16 AM
- Electronic Arts (NASDAQ:EA) is up 1.8% premarket as UBS upgrades shares to Buy.
- The analysts set a price target of $80, raised from $65. Shares closed yesterday at $68.01.
- UBS has raised fiscal year estimates for the game maker, putting its non-GAAP revenues at $4.63B (up from $4.48B) and EPS to $3.01 (from $2.84). Consensus estimates for revenues are at $4.49B and for EPS of $2.86.
- UBS also expects adjusted fiscal 2016 EBITDA of $1.5B, up from $1.43B and vs. a consensus of $1.38B.
- The firm says there's "continued runway for outperformance" considering factors including a continuing shift to digital sales and a title slate that will get a boost from Star Wars: Battlefront.
Jun. 26, 2015, 11:07 PM
- Mizuho Securities launched coverage on videogame makers with a bullish cast -- setting Buy ratings for Activision Blizzard (NASDAQ:ATVI), Electronic Arts (NASDAQ:EA) and Take-Two Interactive (NASDAQ:TTWO).
- The firm gave a Neutral rating to Ubisoft (OTCPK:UBSFY).
- Its top pick goes to Activision Blizzard, with ample upside left: "Much of the potential upside coming from Blizzard - continued traction with Hearthstone, along with two new IP properties Heroes of the Storm and Overwatch. And with CoD: Black Ops III, Destiny: The Taken King, Guitar Hero, and Call of Duty Online, we see solid tailwinds from the Activision side."
- For EA, analyst Neil Doshi points to some well-known catalysts: the now-detailed Star Wars: Battlefront game as well as the company's sports franchises. "For now we remain buyers, despite valuation getting fuller, as we believe new games should lead to sustained growth and digital should pave the way for more margin expansion."
- Today: EA +0.3%; ATVI -1.4%; TTWO +0.8%; OTCPK:UBSFY -1.4%.
- Previously: EA, Take-Two up on bullish Jefferies sales notes (Jun. 24 2015)
- Previously: Electronic Arts shares rise during encouraging E3 (Jun. 18 2015)
Jun. 24, 2015, 9:54 AM
- Take-Two (TTWO +3.3%) and Electronic Arts (EA +2.4%) both rose this morning as Jefferies issued reports raising each firm to Buy, from Hold, with an eye toward the advancement of the new game console cycle.
- With around 48M-49M new-generation consoles in the wild at year's end, annual growth would be about 69%, and there might be 100M installed units by the end of 2017 -- leading to some sales capitalization from both firms off of fixed development costs.
- "EA looks well positioned against two multi-year tailwinds: faster than expected console sales and the transition to higher-margin digital revenue," Brian Pitz wrote. He raised EA's price target to $80, from $58. Shares are currently trading at $68.20.
- Brian Fitzgerald is looking for continued margin expansion at Take-Two and raised its target to $35 from $29. Shares are currently at $28.92.
Jun. 18, 2015, 11:17 PM
- Electronic Arts (NASDAQ:EA) grabbed the reins at the E3 gaming expo -- announcing three new Star Wars games, headlined by Star Wars: Battlefront, and pointing to its annual sports titles.
- Positivity around Battlefront may be raising the company's fortunes as analysts raise sales estimates; Piper Jaffray's Michael Olson thinks EA could sell 9.5M units in its fiscal 2016. The game comes out Nov. 17 ahead of the Dec. 18 release of the seventh film, Star Wars: The Force Awakens.
- EA shares rose 4% through the conference. Meanwhile, Activision Blizzard (NASDAQ:ATVI), which didn't hold a media event, fell 1%. For its part, it highlighted November's Call of Duty: Black Ops 3, the latest entry in that multibillion-dollar franchise, as well as the return of another franchise in Guitar Hero Live.
- Activision also will be adding playable vehicles to its $3B toys-to-life franchise Skylanders.
- Nintendo (OTCPK:NTDOY) -- with a fairly surprise-free lineup and no media briefing -- had a lackluster show, and shares fell 3.3% in the interim.
Jun. 16, 2015, 11:38 PM
- Stocks of videogame makers have been on a run heading into this year's E3 conference, but will they have anything left for the holiday season?
- Electronic Arts (NASDAQ:EA) and Activision Blizzard (NASDAQ:ATVI) are up 30% and 22% YTD respectively -- but are also trading at 21 times and 18 times forward earnings, well above average. Nintendo (OTCPK:NTDOY) and Sony (NYSE:SNE) have risen more than 50% in Tokyo trading.
- There's still tailwinds to come, Dan Gallagher says, including the shift to digital sales and the migration to next-gen consoles, not to mention the potential of virtual reality.
- This E3 is heavy on the games -- a natural outcome of a bigger installed base for new-generation Xbox One and PlayStation 4 consoles.
- Meanwhile, digital game sales ($979M in May) have increased to four times physical new game sales, meaning better margins.
- Previously: Sony's PS4 gains from new exclusives, preferred game windows (Jun. 16 2015)
- Previously: Ubisoft previews new 'South Park' game, range of sequels (Jun. 15 2015)
- Previously: EA gives first in-game look at 'Star Wars: Battlefront' (Jun. 15 2015)
- Previously: Microsoft bringing Xbox 360 games to One, Minecraft to HoloLens (Jun. 15 2015)
Jun. 15, 2015, 8:30 PM
- Electronic Arts (NASDAQ:EA) spent today at E3 with a heavy look at Star Wars: Battlefront during a briefing that gave some long-awaited extended peeks at gameplay captured from a PlayStation 4.
- The game is set back in the time of the original Star Wars trilogy, and with a Nov. 17 release date, it will ride ahead of a wave of games and merchandise tied to the new material.
- The new Battlefront feature a dozen multiplayer maps that mix ground fighting and group assaults with aerial dogfights, as well as a number of single-player missions.
- The company also announced a mobile collectible-card role-playing game, Star Wars: Galaxy of Heroes, a clear competitor to Activision's Hearthstone.
- EA even hinted that the Frostbite engine it uses in games including Battlefront may be robust enough to run virtual reality titles for the company.
- EA also teased Plants vs. Zombies: Garden Warfare 2, Mirror's Edge: Catalyst, Need for Speed and a new platformer about a creature made of yarn called Unravel.
- E3 formally gets going tomorrow.
Jun. 8, 2015, 11:59 PM
- In a look-ahead to this year's Electronic Entertainment Expo, Wedbush has its eye on a number of companies, but none more so than console battlers Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE).
- The team (Michael Pachter, Nick McKay and Alicia Reese) highlights a few "what to watch" notes for the consoles: price cuts for the current-gen consoles (Xbox 360 and PS3); no price cuts for next-gen (Xbox One and PS4) as they expect the focus will be on new product bundles; a virtual-reality interface-off between the two; and a battle of notable games (and possible exclusives) on each.
- Among game publishers, they're looking to Activision Blizzard (NASDAQ:ATVI) for news about the holiday season release of its next Call of Duty: Black Ops III; Electronic Arts (NASDAQ:EA) and its annual sports titles (with possible surprises from Star Wars: Battlefront), and a high-stakes game from Take-Two rumored to be called Advent.
- E3 begins June 16 at the Los Angeles Convention Center.
May 19, 2015, 3:11 PM
- Electronic Arts (EA -0.8%) CEO Andrew Wilson says in an SEC filing that mobile chief Frank Gibeau has left the firm after more than 20 years there.
- The mobile team now reports directly to Wilson.
- "Our studio teams have new experiences in development for some of EA’s biggest franchises, powerful new IP like The Minions and Star Wars, and more creative concepts at early stages in the testing process," Wilson writes.
- Monthly active users for the company's mobile games averaged more than 165M last quarter, and mobile revenue set a company record with $524M for the fiscal year.
May 15, 2015, 4:52 PM
- Video game spending was up slightly Y/Y in April, gaining 3% to $595.7M, paced by a 13% increase in physical software sales, according to industry trackers NPD Group.
- That's apart from mixed results in hardware sales -- which were up 12% in unit terms, but declined 4% on a dollar basis to $183.9M, after a round of console price cuts.
- Physical software rose to $256.7M. This month, violent games took the spotlight, with "Fatality"-friendly Mortal Kombat X (NYSE:TWX) the new game topping the chart. It was followed by Grand Theft Auto V (NASDAQ:TTWO) and Battlefield: Hardline (NASDAQ:EA). MLB 15: The Show (NYSE:SNE), another new game, came in at the fourth spot, just ahead of Minecraft.
- GTAV was one of three games that Take Two had in the top 10, along with NBA 2K15 and Borderlands: The Handsome Collection.
- At long last, the Xbox One (NASDAQ:MSFT) took over the top console spot from PlayStation 4 (SNE) despite no big game news to push it; Xbox One sales were up 63% Y/Y.
- Nintendo (OTCPK:NTDOY) says that the Wii U is up 15% for the first four months of 2015 vs. the year-ago period, and 3DS sales up 65% Y/Y for that same period.
May 15, 2015, 4:07 PM
- Senate Bill 9 has been passed by both legislative chambers in Nevada, clearing the way for skills-based casino floor games.
- The development also opens a door for videogame sellers to create or license casino versions of their popular titles.
- The casino industry has its eyes on attracting millennials after seeing the group show tepid demand for classic table games and slot machines.
- New Jersey and Mississippi have also set the stage for casino floor innovation with similar legislation.
- Previously: Paging Steve Nash to the Borgata (Feb. 13)
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Electronic Arts, Inc. is a global interactive entertainment software company. The company is organized into three divisions: EA Studios, EA Mobile and Maxis. The EA Studios division is responsible for developing games and related content and services across an expansive range of game categories.... More
Industry: Multimedia & Graphics Software
Country: United States
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