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?
May 5, 2015, 4:22 PM
- Electronic Arts (NASDAQ:EA) is up 4.4% after hours, following a fiscal Q4 report where it beat expectations for revenue and earnings and finished a record year for net revenue and operating cash flow.
- EA says it reached a three-year goal to double operating margins to 20% a year ahead of schedule.
- Non-GAAP revenue by segment: Digital net revenue, $602M (up 9.5%); Packaged Goods and Other net revenue, $294M (down 19.2%).
- EA noted that during its fiscal year it was the top publisher on PlayStation 4 and Xbox One consoles, on the back of Battlefield: Hardline (30M game sessions in Q4), Dragon Age: Inquisition (200M hours played in total) and other games including Madden NFL 15 and FIFA 15.
- The company authorized a new $1B repurchase program for the next two years.
- Conference call at 5 p.m. ET.
May 5, 2015, 4:06 PM
- Electronic Arts (NASDAQ:EA): FQ4 EPS of $0.39 beats by $0.14.
- Revenue of $896M (-2.0% Y/Y) beats by $45.77M.
- Shares +4%.
May 4, 2015, 5:35 PM
- ACLS, AGU, AIZ, ALL, AMRS, AMSG, ANAD, ANDE, ARC, ATSG, AWR, AXLL, BIO, BRDR, CENT, CERS, CLUB, COUP, CRAY, CSU, CTL, CVG, CYH, DK, DKL, DLR, DTLK, DVN, EA, ENPH, EXAM, FISV, FOSL, FTR, GCA, GHDX, GMED, GNMK, GPOR, GRPN, HK, HLF, HRZN, IAG, ICUI, IGTE, IRWD, JIVE, KAR, KGC, KONA, LC, MHLD, MM, MYGN, MYL, NDLS, NFX, NVGS, NYMT, OCLR, OKE, OKS, OUT, PAA, PACB, PAGP, PBPB, PKD, PXD, PZZA, QGEN, QNST, QUAD, REGI, REXX, RLOC, RNR, RP, RUBI, SBRA, SCTY, SKUL, SLF, SM, SPA, SUPN, TEG, TMH, TNET, TRNX, TSRA, TTGT, USNA, VVUS, WAGE, WES, WGP, WR, WSR, WSTC, WTR, WTW, XXIA, Y, ZAGG, ZEN, ZLTQ, ZU
Apr. 17, 2015, 5:39 PM
- A new version of popular series Battlefield wasn't enough to boost video game sales in March, as software sales slipped 3% Y/Y to $395.4M. But software was positively solid compared to game hardware sales that slipped 21% Y/Y to $311.1M, according to NPD Group.
- In new retail games, Battlefield: Hardline (NASDAQ:EA), a cops-and-robbers version of the war-game series, led sales charts followed by another new entry, action role-player Bloodborne (NYSE:SNE) which was strong despite being a PS4 exclusive.
- The top five was rounded out by Grand Theft Auto V (NASDAQ:TTWO), Mario Party 10 (OTCPK:NTDOY), and Call of Duty: Advanced Warfare (NASDAQ:ATVI).
- Physical software sales showed sharp declines for previous-generation consoles, which points to the health of the new generation (PS4, Xbox One, Wii U), whose software sales increased 58% Y/Y.
- In hardware, Sony says PS4 again topped the charts, but everyone's doing well in the new generation: “This is the 17th month of sales for the Xbox One and PS4, whose combined cumulative hardware sales are over 50% higher than the combined 17-month cumulative sales totals for the Xbox 360 and PS3,” said NPD's Liam Callahan.
- In a market down more than 1% today, GameStop (NYSE:GME) did worse, down 3.1%.
- And in other EA news, at the ongoing "Star Wars Celebration" event going on in Anaheim, Calif., today's news included the reveal trailer for Star Wars: Battlefront wowing fans. Launching Nov. 17, the game showcases high-definition visuals but takes a somewhat risky move of dropping single-player missions entirely for cooperative and multiplayer.
Mar. 13, 2015, 5:15 PM
- NPD estimates U.S. physical retail game sales rose 7% Y/Y in February to $338.9M, up from January's 5% growth and better than expected. Hardware sales rose 10% to $378.2M, as next-gen console demand remains healthy. Superdata Research estimates digital game revenue rose just 2% to $995M, thanks to weak mobile and social game sales.
- Nintendo (OTCPK:NTDOY) had a good month: The recently-refreshed 3DS XL handheld was February's top-selling console - Ninetendo says 394K 3DS units were sold - and The Legend of Zelda: Majora's Mask 3D (launched on Feb. 13) topped NPD's game rankings.
- Take-Two (NASDAQ:TTWO) also did well: Evolve (launched on Feb. 10) was #2 on NPD's list, GTA V came in at #5 (down from January's #3) ahead of its March 24 PC launch, and NBA 2K15 was at #6 (down from #5). Take-Two recently said it was "very pleased" with Evolve's launch.
- Activision's (NASDAQ:ATVI) Call of Duty: Advanced Warfare fell two spots to #4, while Destiny (#9 last month) fell out of the top-10. Electronic Arts' (NASDAQ:EA) Madden NFL 15 and FIFA 15 also dropped out.
- Piper observes Take-Two and Activision's NPD sales were respectively up 72% and 16% Y/Y in February, and that EA's were down 32% over the first two months of 2015. It maintains Overweight ratings on all 3 firms.
- Take-Two rose 3.9% in regular trading thanks to the numbers. GameStop (NYSE:GME) also got a lift, rising 3.5%. Activision rose 0.9% and EA rose 0.4%.
Mar. 10, 2015, 10:41 AM
- With shares having closed yesterday not far from a 52-week high of $58.87 (set on Feb. 26), Needham has downgraded Electronic Arts (NASDAQ:EA) to Hold.
- The gaming giant remains up 13% from where it traded prior to its Jan. 27 FQ3 beat, which was driven by surging digital revenue and cost controls. EA currently goes for ~15x trailing free cash flow.
Feb. 9, 2015, 7:21 AM
- A state senate bill floating around in Nevada proposes to allow more games of skill than chance on the floors of casinos in the state.
- A passage of the bill could set off a flood of new casino games based off of popular videogames.
- Videogames at casinos are seen as a way to draw in more of the 75M millennials who as a group have shied away from slot machines and games of blind luck.
- The potential also exists to introduce gambling through apps for games in Nevada and create cash tournaments online.
- Related stocks: LVS ,CZR, BYD, MGM, WYNN, SGMS, ATVI, TTWO, EA.
Jan. 28, 2015, 12:44 PM
Jan. 27, 2015, 6:28 PM
- Electronic Arts (NASDAQ:EA) is guiding for FQ4 revenue of $830M and EPS of $0.22, below a consensus of $911.6M and $0.26. However, the huge beat posted for EA's seasonally biggest quarter is taking priority.
- EA's packaged goods/other revenue (traditional game sales) fell 31% Y/Y in FQ3 to $755M. But full game download revenue rose 22% to $140M, extra content revenue 47% to $314M, and subscriptions/ad/other revenue 52% to $100M. Mobile revenue grew 13% to $139M.
- Also boosting EPS: Sales/marketing spend fell 21% to $169M. R&D spend rose 3% to $283M. $97M was spent on buybacks.
- Xbox One/PS4 revenue rose 51% to $593M. Xbox 360/PS3 revenue fell 42% to $412M. International markets accounted for 58% of sales.
- FQ3 results, PR
Jan. 27, 2015, 4:05 PM
- Electronic Arts (NASDAQ:EA): FQ3 EPS of $1.22 beats by $0.30.
- Revenue of $1.43B (-8.9% Y/Y) beats by $140M.
Jan. 26, 2015, 5:35 PM
Jan. 16, 2015, 10:35 AM
- Activision's (ATVI +6.3%) Call of Duty: Advanced Warfare topped NPD's U.S. physical retail game sale rankings for the second month in a row in December. Destiny, which Activision hopes will be its third $1B+ franchise, was #9.
- In a PR, Activision says Advanced Warfare was the "top-selling console game of 2014 globally," and that Destiny was the #2 2014 U.S. console game in terms of revenue. Skylanders was the top kids video game franchise globally (inc. toys/accessories sales), with a 30% sales edge over its biggest rival (presumably Disney's Infinity).
- Electronic Arts' (EA - unchanged) Madden NFL 2015 rose a spot to #3, and FIFA 15 returned to the top-10 (at #10). Take-Two's (TTWO +1.8%) Grand Theft Auto V was at #2 for another month, continuing to get a lift from its next-gen console and PC launches. NBA 2K15 rose three spots to #5.
- NPD estimates total U.S. physical retail game sales fell 2% Y/Y to $1.25B. Hardware sales, facing tougher comps (given next-gen consoles launched in Nov. 2013), fell 4% to $1.31B, with the Xbox One outselling the PS4. Next-gen consoles are performing 65% better than prior-gen consoles had over their first 14 months. GameStop (GME +3%), just three days removed from reporting better-than-expected holiday sales, is reacting favorably to the numbers.
- Superdata Research estimates U.S. digital game spend rose 11% Y/Y in December to $1.2B. Mobile game sales (35% of 2014 sales) rose 17%, and digital console game sales (8% of 2014 sales) 10%.
- EA reports on Jan. 27, Take-Two on Feb. 3, and Activision on Feb. 5.
- Previously: NPD's November data
- Update (2:15PM): EA is now up 1.8%, aided by a 0.8% increase for the Nasdaq. Activision is now up 9.2%, Take-Two 4.2%, and GameStop 4.5%.
Jan. 6, 2015, 10:29 PM
Jan. 1, 2015, 2:19 AM
- Dow: INTC +41%; UNH +35%; HD +28%; CSCO +25%; MSFT +25%.
- S&P 500: LUV +125%; EA +106%; EW +95%; AGN +92%; AVGO +91%.
- Nasdaq: AAL +112%; EA +106%; AVGO +91%; GMCR +78%; ILMN +68%.
Dec. 13, 2014, 8:45 AM
- American Airlines (NASDAQ:AAL), Electronic Arts (NASDAQ:EA), and Lam Research (NASDAQ:LRCX) will be added to the Nasdaq 100 (NASDAQ:QQQ) ahead of the open on December 22.
- Removed will be Expedia (NASDAQ:EXPE), F5 Networks (NASDAQ:FFIV), and Maxim Integrated (NASDAQ:MXIM).
- A revision to the index methodology allows multiple share classes of index participants to be included, so Comcast Class A Special (NASDAQ:CMCSK), Twenty-First Century Fox Class B (NASDAQ:FOX), and Liberty Global Class C (NASDAQ:LBTYK) will also become part of the index.
- ETFs: QQQ, PSQ, TQQQ, QID, SQQQ, QLD, QQEW, QQQE, QQXT
Dec. 12, 2014, 10:39 AM
- Though Activision's (ATVI -1.5%) Call of Duty: Advanced Warfare was (as expected) #1 in NPD's November U.S. physical retail game sale rankings, Call of Duty franchise sales were down 27% Y/Y and Activision's total sales down 22%.
- That has led Piper to slash its Activision target by $3 to $24. "Strength in the Blizzard side of the business (WoW & HearthStone) should allow for an in-line Q4, but we are slightly lowering our estimates to now be in-line with company guidance."
- Take-Two (TTWO +3.3%), meanwhile, has rallied towards its 52-week high after Grand Theft Auto V (recently become available on the Xbox One, PS4, and PCs) ranked #2. NBA 2K15 was #8, down one spot from October. Borderlands: The Pre-Sequel fell out of the top-10.
- Electronic Arts' (EA +0.5%) Madden NFL 15 rose four spots to #4, but FIFA 15 fell out of the top-10. BofA/Merrill has hiked its targets (I, II) for both EA and Take-Two following NPD's numbers: It's optimistic EA can continue growing margins thanks to growing digital sales and cost controls, and argues Take-Two deserves a multiple similar to EA and Activision's.
- NPD estimates total U.S. physical game sales fell 2% Y/Y in November to $1.09B, a much smaller drop than October's 27%. With next-gen consoles having launched a year ago, hardware sales fell an estimated 23% to $1.01B, with the Xbox One (1.2M sales) outselling the PS4 following a $50 early-November price cut.
- Wedbush's Michael Pachter thinks game sales growth may have been positive after accounting for downloads and the frequent bundling of games with consoles. Meanwhile, Superdata Research estimates total digital game spend rose 23% Y/Y during the Thanksgiving period.
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
Other News & PR