Electronic Arts (EA) to Report Q1 Earnings: What's in Store?
Electronic Arts EA is set to report first-quarter fiscal 2024 results on Aug 1.
For first-quarter fiscal 2024, EA expects GAAP revenues between $1.825 billion and $1.925 billion and earnings in the range of $0.98-$1.14 per share.
For the quarter, the Zacks Consensus Estimate for earnings has remained steady at $1.01 per share in the past 30 days. The figure indicates 215.63% growth from the year-ago quarter’s reported figure.
The consensus mark for revenues, pegged at $1.59 billion, suggests a 22.62% increase from the year-ago quarter’s reported figure.
The company’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters and missed twice, the average surprise being 7.28%.
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
Slow yet steady demand for EA’s digital and live services across its portfolio is expected to have reflected upon active user growth in the fiscal first quarter.
In the to-be-reported quarter, Electronic Arts announced the release of EA SPORTS F1 23, which offers enhanced handling upgrades and incorporates input from real F1 teams. This game delivers an authentic experience for players as they compete against all teams and drivers across the 2023 season's circuits.
EA SPORTS and Metalhead also released Super Mega Baseball 4, the newest addition to the highly praised Super Mega Baseball series. This latest instalment takes the excitement and authenticity to new heights by introducing more than 200 real-life baseball legends.
Moreover, EA and CONMEBOL have made a significant and historic agreement to extend its partnership for multiple years with EA SPORTS. This renewed collaboration solidifies EA SPORTS as CONMEBOL's exclusive Sports Video Gaming Partner. This partnership is expected to have boosted the top line in the to-be-reported quarter.
However, increase in active users after the release of blockbuster games like EA SPORTS FIFA and Apex Legends is expected to have boosted net bookings growth in the to-be-reported quarter. Net bookings for the fourth quarter of fiscal 2023 were $1.946 billion, up 11% or 15% in constant currency year over year.
The company expects net bookings between $1.5 billion and $1.6 billion in the fiscal first quarter of 2024. The Zacks Consensus Estimate for bookings is currently pegged at $1.58 billion, indicating a rise of 22.08% year over year.
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 and The Lord of the Rings: The Return of the King is expected to have positively impacted the top line.
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.
Sluggishness in video game spending in the quarter is expected to have reflected in EA’s top-line growth. Per VentureBeat, which cited NPD data and consumer spending on video games, declined 6% in April and increased 12% in May.
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.
EA currently has an Earnings ESP of +2.54% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
Itron ITRI has an Earnings ESP of +13.78% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Itron is scheduled to release second-quarter 2023 results on Aug 3. The Zacks Consensus Estimate for ITRI’s earnings is pegged at 31 cents per share, suggesting a jump from the prior-year quarter’s reported figure of 7 cents.
CACI International CACI has an Earnings ESP of +2.36% and a Zacks Rank #2 at present.
CACI is set to report its fourth-quarter fiscal 2023 results on Aug 9. The Zacks Consensus Estimate for CACI’s earnings is pegged at $4.85 per share, suggesting growth of 6.8% from the prior-year quarter’s reported figure.
Carrier Global CARR has an Earnings ESP of +1.53% and a Zacks Rank #3 at present.
Carrier is set to report second-quarter 2023 results on Jul 27. The Zacks Consensus Estimate for CARR’s earnings is pegged at 76 cents per share, suggesting growth of 10.1% from the prior-year period’s reported figure.
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