Electronic Arts First Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Electronic Arts Inc. (NASDAQ:EA) will unveil its latest earnings tomorrow, Tuesday, July 31, 2012.

Electronic Arts Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net loss of 51 cents per share, a wider loss from the year-earlier quarter net loss of 48 cents. During the past three months, the average estimate has moved down from a loss of 44 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at a loss of 51 cents during the last month. Analysts are projecting profit to rise by 105.9% versus last year to 70 cents.

Past Earnings Performance: Last quarter, the company missed estimates by one cent, coming in at net income of 5 cents per share versus a mean estimate of profit of 6 cents per share. In the third quarter of the last fiscal year, the company beat estimates by 3 cents.

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A Look Back: In the fourth quarter of the last fiscal year, profit rose more than twofold to $400 million ($1.21 a share) from $151 million (45 cents a share) the year earlier, but fell short analyst expectations. Revenue rose 25.5% to $1.37 billion from $1.09 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 4.3% in revenue from the year-earlier quarter to $501.4 million.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.23 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 22.6% in the first quarter of the last fiscal year, 13.3% in the second quarter of the last fiscal year and 0.8% in the third quarter of the last fiscal year before increasing again in the fourth quarter of the last fiscal year of the last fiscal year.

Heading into this earnings season, the company is looking to build on good signs from last quarter. The company reported losses in the second quarter of the last fiscal year and the third quarter of the last fiscal year, but finished in the black with income of $400 million in the fourth of the last fiscal year.

Analyst Ratings: There are 12 out of 20 analysts surveyed (60%) rating Electronic Arts a buy.

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

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