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Electronic Arts (EA) to Report Q4 Earnings: What's in Store?

Electronic Arts EA is set to report fourth-quarter fiscal 2022 results on May 10.

For fourth-quarter fiscal 2022, EA expects GAAP revenues of $1.759 billion and earnings of 46 cents per share.

For the quarter, the Zacks Consensus Estimate for earnings has remained unchanged at $1.45 per share in the past 30 days. The figure indicates 40.78% growth from the year-ago quarter’s reported figure.

The consensus mark for revenues, pegged at $1.77 billion, suggests an 18.64% increase from the year-ago quarter’s reported figure.

EA’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, missing the same in one and meeting in the other. EA has a trailing four-quarter earnings surprise of 10.06%, on average.

Let’s see how things have shaped up for this announcement.

Electronic Arts Inc. Price and EPS Surprise

Electronic Arts Inc. price-eps-surprise | Electronic Arts Inc. Quote

Factors to Consider

Strong demand for EA’s digital and live services across its portfolio is expected to have boosted recurring revenues and year-over-year growth in fourth-quarter 2022 results.

Fiscal fourth-quarter active user growth is expected to have been boosted by updates featuring exciting content in existing games and an expanding portfolio, including the launch of Legacy of the Sith — the latest expansion for Star Wars: The Old Republic and the latest installment of its free-to-play mobile baseball franchise, MLB Tap Sports Baseball 2022, the first game released by Electronic Arts following its acquisition of Glu Mobile last year.

Electronic Arts launched an expansive update of Electronic Art’s hit mobile game EA SPORTS FIFA Mobile. The company along with Codemasters also launched a cross-platform multi-player gameplay GRID Legends. The growing popularity of the new releases is expected to have aided top-line growth and booking.

In the last reported quarter, net bookings reached $2.58 billion, up 7.4% year over year, primarily driven by sales related to FIFA 22, Battlefield 2042, Apex Legends, and Madden NFL 22. The trend is likely to have continued in the to-be-reported quarter.

The company expects net bookings of approximately $1.761 billion in the fourth quarter of 2022.

The Zacks Consensus Estimate for bookings is currently pegged at $749 million, indicating growth of 19.6% year over year.

In the last reported quarter, Apex Legends monthly active players were up 30% year over year.

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The company expects a rise in engagement levels and usage for Apex Legends in the fourth quarter of fiscal 2022.

Notably, EA's strength in Live Services in mobile game franchises such as Battlefield 2042, It Takes Two, Madden Mobile, FIFA Mobile, Tetris, Star Wars: Galaxy of Heroes, The Lord of the Rings: The Return of the King is expected to have positively impacted the top line. Revenues from the mobile platform increased 78% year over year to $277 million in the last reported quarter.

With new launches, acquired expertise and innovation in technology leveraged across EA’s portfolio in the fourth quarter, the company is anticipated to have witnessed major growth in its mobile platform.

However, EA has been witnessing increased operating expenses for game development and marketing. The rising expenses are expected to have kept margins under pressure in the to-be-reported quarter.

Key Q4 Highlights

In January, EA and Lucasfilm Games announced their decision to work together to continue delivering new, world-class gaming experiences within the Star Wars universe. Upcoming titles include the next game in the Star Wars Jedi Franchise, a new Star Wars FPS from Peter Hirschmann and a strategy game via a publishing collaboration between Respawn and Bit Reactor.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

EA has an Earnings ESP of -1.89% and carries a Zacks Rank #4 (Sell) currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Golden Entertainment GDEN has an Earnings ESP of +7.72% and a Zacks Rank #2. The company is set to announce first-quarter 2022 results on May 5. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GDEN is down 9.1% in the year-to-date period against the Zacks Gaming industry’s decline of 27.2% and the Consumer Discretionary sector’s fall of 22.8%.

Plant Fitness PLNT has an Earnings ESP of +22.68% and a Zacks Rank #2. The company is all set to announce its first-quarter 2022 results on May 10.

PLNT is up 16.1% in the year-to-date period against the Zacks Leisure and Recreation Services industry’s decline of 16.3% and the Consumer Discretionary sector’s fall of 22.8%.

Analog Devices ADI has an Earnings ESP of +2.17% and a Zacks Rank #2. The company is set to report its second-quarter 2022 results on May 18.

ADI is down 9.6% in the year-to-date period against the Zacks Semiconductor - Analog and Mixed industry’s decline of 13.4% and the Computer and Technology sector’s fall of 18.6% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Analog Devices, Inc. (ADI) : Free Stock Analysis Report

Electronic Arts Inc. (EA) : Free Stock Analysis Report

Planet Fitness, Inc. (PLNT) : Free Stock Analysis Report

Golden Entertainment, Inc. (GDEN) : Free Stock Analysis Report

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