Electronic Arts Soars as Online ‘FIFA,’ ‘Madden’ Aid Profitsby
Shares jump as much as 15% to highest price in six months
Forecast in line, but EA normally conservative, MKM says
Electronic Arts Inc. surged in New York trading after reporting fiscal fourth-quarter results that exceeded analysts’ estimates, buoyed by online sales to gamers drawn to its sports and “Star Wars” titles.
Adjusted earnings of 50 cents a share topped the 42-cent average estimate of analysts, according to data compiled by Bloomberg. The shares jumped as much as 16 percent to $74.92, the highest intraday price in six months, making the stock the biggest gainer on the Standard & Poor’s 500 Index.
EA is managing the shift in consumer preferences from prepackaged games to digital services, luring players online to play games like “FIFA,” “Madden NFL” and “Hockey Ultimate Team.” Digital net revenue rose 18 percent from a year earlier to $712 million, while packaged-good net sales slid 28 percent to $212 million.
Net sales climbed 3.1 percent in the quarter to $924 million, beating the average $889 million projection.
For fiscal 2017, which ends next March, EA forecast earnings of $3.50, excluding some items -- in line with analysts’ estimates. Net sales will be $4.9 billion, EA said, compared with the average projection of $4.83 billion.
That outlook may be conservative, said Eric Handler, an analyst at MKM Partners, in a note. He said EA has exceeded its initial earnings forecast by an average of 30 percent over the past three years.