Game publisher EA’s fourth-quarter revenue beats estimates


(Reuters) – Electronic Arts Inc (EA.O) reported a fourth-quarter revenue on Tuesday that beat Wall Street estimates, driven by sales of its popular sports titles “FIFA” as well as franchises like “Battlefield” and “The Sims”.

FILE PHOTO: An Electronic Arts (EA) video game logo is seen at the Electronic Entertainment Expo, or E3, in Los Angeles, California, United States, June 17, 2015. REUTERS/Lucy Nicholson/File Photo GLOBAL BUSINESS WEEK AHEAD

The videogame publisher’s shares were up 2.5 percent at $127 in after-market trading.

On an adjusted basis, EA’s revenue was $1.26 billion for the reported quarter, beating analysts’ average estimate of $1.24 billion, according to Thomson Reuters I/B/E/S.

Sales at EA’s high-margin digital business rose 18 percent to $1.10 billion in the fourth quarter as more gamers bought their titles online instead of purchasing physical copies from retail stores.

The company also announced a new $2.4 billion share repurchase program on Tuesday.

Net income rose to $607 million, or $1.95 per share, in the fourth quarter ended March 31, from $566 million, or $1.81 per share, a year earlier.

Videogame companies are required to defer some revenue from certain online-enabled games following a tweak to the U.S. accounting rules.

The company forecast first-quarter adjusted revenue of $720 million, excluding mobile platform fees of about $60 million. Analysts were expecting revenue of $795.9 million, according to Thomson Reuters I/B/E/S.

The success of games from the “battle royale” genre such as “Fortnite” have somewhat challenged publishers including Activision Blizzard Inc (ATVI.O) and Take Two Interactive Software Inc (TTWO.O).

Epic Games launched the free-to-play “battle royale” mode for “Fortnite” on computers and gaming consoles in September. The mode allows up to 100 online players to battle each other to the death until only one player survives.

“We don’t see it as a threat, we see it as an opportunity,” COO and CFO Blake Jorgensen told Reuters when asked about “Fortnite”.

“Fortnite” has brought in younger players into the industry which is good for EA and other publishers in the long run, Jorgensen said.

Reporting by Arjun Panchadar in Bengaluru; Editing by Shounak Dasgupta


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