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Electronic Arts reported lukewarm earnings today for the fourth-fiscal quarter ended March 31, as live operations and original titles carried it through a relatively quiet quarter.
The Redwood City, California-based video game giant reported net income of $76 million, or 26 cents a share, on revenues of $1.35 billion, compared with net income of $418 million, or $1.43 a share, on revenue of $1.39 billion. About 81% of sales came from live operations for existing games such as FIFA 21. EA didn’t really address why the quarter was lukewarm, but it may have had something to do with a light slate of games and less of a boost from the pandemic, which gave the industry a big boost as people played games while sheltering in place.
For the full fiscal year ended March 31, EA reported net income of $837 million on revenue of $5.6 billion. EA said annual net bookings were $6.19 billion, up 15% from a year earlier and more than $600 million above its original expectations. In afterhours trading, EA’s stock is down 1.4% to $139.37 a share.
Analysts expected EA’s adjusted earnings per share for the quarter to be $1.05, based on a consensus from analysts, on revenues of $1.4 billion. On a GAAP basis, the net loss was expected to be $19 million, or 7 cents a share.
During the quarter, EA closed its acquisition of Glu Mobile for $2.4 billion. It also launched It Takes Two, a smaller EA Originals game from third-party developer Josef Faris and his Hazelight studio. It received good reviews, and it sold over 1 million copies less than a month after its March 26 release.
In the current first-fiscal quarter ending June 30, EA is launching Mass Effect: Legendary Edition May 14. This RPG series is a fan-favorite, and BioWare is remastering the trilogy in this package for PC and PlayStation and Xbox consoles.
“Our teams have done incredible work over the last year to deliver amazing experiences during a very challenging time for everyone around the world,” said CEO Andrew Wilson in a statement. “With tremendous engagement across our portfolio, we delivered a record year for Electronic Arts. We’re now accelerating in FY22, powered by expansion of our blockbuster franchises to more platforms and geographies, a deep pipeline of new content, and recent acquisitions that will be catalysts for further growth.”
With Glu Mobile, EA should be in a better position to execute strategies like its rival Activision Blizzard has done with Call of Duty. Both Call of Duty: Mobile and Call of Duty: Warzone have served as free-to-play games that garner a massive audience and funnel the users toward a premium product like Call of Duty: Black Ops — Cold War. These keep players glued to the Call of Duty franchise year-round, and they can help stave off competitors.
With Battlefield, EA’s approach will be different. Its free-to-play mobile Battlefield game will likely launch in 2022, which is after the Battlefield PC and console game launches later this year.
For the fiscal year ending March 31, EA had previously expected revenue to be approximately $5.6 billion. Diluted earnings per share was expected to be approximately $2.54. During the fiscal year, EA delivered 13 games and saw more than 42 million new players join its network.
FIFA 21, life to date, has more than 25 million console/PC players. FIFA Ultimate Team players grew 16% year-over-year and FUT matches were up 180%. Apex Legends has more than 100 million players life to date on console/PC, and Season 8 had more than 12 million weekly average players.
A record number of new players joined Madden NFL on console/PC during fiscal 21. The Sims 4, life to date, has almost 36 million players and delivered its sixth consecutive year of franchise growth. EA said that net cash provided by operating activities was $371 million for the quarter and $1.934 billion for the fiscal year.
Most of EA’s sales in the quarter came from the consoles, followed by the PC and then mobile.
A look ahead
For the upcoming fiscal year ending March 31, 2022, EA forecast that net income will be $390 million, or $1.34 a share, on revenues of $6.8 billion. Operating cash flow is expected to be $1.75 billion, and books will be $7.3 billion.
For the first fiscal quarter ending June 30, EA forecast that net income will be $70 million, or 24 cents a share, on revenues of $1.475 billion. Net bookings are expected to be $1.25 billion, and EA said that it expects consolidation of results from recent acquisitions will have an impact on the quarter.
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