Electronic Arts Earnings: Swing to a Loss After Two Straight Profit Quarters

S&P 500 (NYSE:SPY) component Electronic Arts Inc. (NASDAQ:EA) reported its results for the second quarter. Electronic Arts develops and distributes video game software and content across a variety of platforms.

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Electronic Arts Inc. Earnings Cheat Sheet

Results: Loss widened to $381 million ($1.21 per diluted share) from $340 million (loss of $1.03 per share) in the same quarter a year earlier.

Revenue: Fell 0.6% to $711 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Electronic Arts Inc. reported adjuted net income of breaking even. By that measure, the company was about in line with the mean estimate. It fell short of the average revenue estimate of $958.5 million.

Quoting Management: “EA is performing well, once again beating street consensus in fiscal Q2,” said Chief Executive Officer John Riccitiello. “We delivered yet another quarter of sharp digital growth, with digital revenue up 40% compared to the same period last year, reflecting our strength across multiple brands and channels.”

Key Stats:

The company beat estimates last quarter after falling short in the previous two quarters. In the first quarter, it missed the mark by 2 cents, and in the fourth quarter of the last fiscal year, it came in under estimates by one cent.

The company’s loss in the latest quarter follows profits in the previous two quarters. The company reported a profit of $201 million in the first quarter and a profit of $400 million in the fourth quarter of the last fiscal year.

Revenue has dropped in the past two quarters. In the first quarter, revenue declined 4.4% to $955 million from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from 82 cents a share to 63 cents over the last ninety days. For the fiscal year, the average estimate has moved down from 78 cents a share to 70 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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