The 10-second takeaway
For the quarter ended March 31 (Q4), Electronic Arts beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share improved significantly.
Margins grew across the board.
Electronic Arts chalked up revenue of $977.0 million. The 20 analysts polled by S&P Capital IQ expected to see net sales of $959.2 million on the same basis. GAAP reported sales were 26% higher than the prior-year quarter's $1.09 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.17. The 20 earnings estimates compiled by S&P Capital IQ anticipated $0.16 per share. GAAP EPS of $1.20 for Q4 were 167% higher than the prior-year quarter's $0.45 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 72.7%, 280 basis points better than the prior-year quarter. Operating margin was 26.8%, 1,290 basis points better than the prior-year quarter. Net margin was 29.2%, 1,530 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $556.7 million. On the bottom line, the average EPS estimate is -$0.36.
Next year's average estimate for revenue is $4.48 billion. The average EPS estimate is $1.13.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,983 members out of 2,246 rating the stock outperform, and 263 members rating it underperform. Among 558 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 492 give Electronic Arts a green thumbs-up, and 66 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Electronic Arts is outperform, with an average price target of $23.55.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.