On Feb. 1, 2007, Electronic Arts (NASDAQ:ERTS) released third-quarter earnings for the period ended Dec. 31, 2006.
- Net revenue has increased by only 0.9%. Sales were driven by Need for Speed: Carbon, FIFA 07, The Sims 2: Pets, and Madden NFL 07 -- each of which sold more than 3 million copies.
- The industry is still transitioning to the latest consoles, Sony's (NYSE:SNE) PlayStation 3 and Microsoft's (NASDAQ:MSFT) Xbox 360. Operating and net margins are down, as the company continues to invest in developing new games.
- Electronic Arts is a three-star stock in our community-intelligence database, CAPS. Of 887 players, 803 think it will outperform the S&P 500. If you've got an opinion, bring it to CAPS!
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q3 2007 |
Q3 2006 |
Change | |
|---|---|---|---|
|
Sales |
$1,281 |
$1,270 |
0.9% |
|
Net Profit |
$160 |
$259 |
(38.2%) |
|
EPS |
$0.50 |
$0.83 |
(39.8%) |
|
Diluted Shares |
319 |
311 |
2.6% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2007 |
Q3 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
63.3% |
60.5% |
2.8 |
|
Operating Margin |
16.8% |
27.3% |
(10.5) |
|
Net Margin |
12.5% |
20.4% |
(7.9) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$2,646 |
$2,723 |
(2.8%) |
|
Accounts Rec. |
$551 |
$567 |
(2.8%) |
|
Inventory |
$72 |
$76 |
(5.3%) |
|
Liabilities |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$170 |
$187 |
(9.1%) |
|
Long-Term Debt |
$0 |
$0 |
N/A |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Q3 2007 |
Q3 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$227 |
$278 |
(18.3%) |
|
Capital Expenditures |
$32 |
$31 |
3.2% |
|
Free Cash Flow |
$195 |
$247 |
(21.1%) |
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Related Companies:
- Konami (NYSE:KNM)
- THQ (NASDAQ:THQI)
- Take-Two Interactive Software (NASDAQ:TTWO)
Related Foolishness:
Electronic Arts is a Motley Fool Stock Advisor pick. To find out why, you can take a 30-day free trial of the newsletter. Microsoft is an Inside Value recommendation.
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