Electronic Arts Inc. (EA) on Tuesday reported a first-quarter profit that dropped from a year ago, however, it trumped Wall Street expectations driven by strong digital revenues.
Redwood City, California-based Electronic Arts reported first-quarter profit of $440 million or $1.40 per share, compared to $442 million or $1.32 per share last year.
Adjusted earnings for the quarter were $22 million or $0.07 per share, down from $49 million or $0.15 per share last year. Analysts polled by Thomson Reuters expected Electronic Arts to post a loss of $0.02 per share. Analysts' estimates typically exclude one-time items.
Electronic Arts' revenues for the first quarter rose to $1.27 billion from $1.20 billion a year ago. Adjusted revenues dropped to $682 million from $693 million last year. Analysts had a consensus revenue estimate of $650.66 million for the quarter.
The company reported digital revenues of $689 million, or about 54 percent of total revenues. The high-margin digital business helped EA report an adjusted profit for the quarter, instead of a loss as the company and the street had forecast.
"Our digital business drove this quarter, particularly outperformance from FIFA Ultimate Team on console and Star Wars: Galaxy of Heroes on mobile," said Chief Financial Officer Blake Jorgensen.
Looking forward to full year 2017, EA expects earnings of about $2.56 per share and revenues of around $4.75 billion. Analysts polled by Thomson Reuters expect earnings of $3.58 per share on revenues of $4.93 billion.
For the second quarter, the company expects loss of about $0.17 per share and revenues of around $915 million. Analysts currently estimate earnings of $0.59 per share and revenues of $1.11 billion.
From the second quarter, EA will stop reporting adjusting financial numbers after regulators criticized how companies apply customized metrics to make their earnings appear better than they are.
EA closed Tuesday's trading at $76.78, up $0.15 or 0.20%, on the NYSE. The stock, however, $0.78 or 1.02% in the after-hours trade.
by RTTNews Staff Writer
For comments and feedback: email@example.com