The 10-second takeaway
For the quarter ended March 31 (Q4), Electronic Arts beat slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share grew significantly. GAAP earnings per share contracted.
Gross margins increased, operating margins contracted, net margins shrank.
Electronic Arts reported revenue of $1.04 billion. The 23 analysts polled by S&P Capital IQ looked for revenue of $1.03 billion on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $1.37 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 $0.55. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.57 per share. Non-GAAP EPS of $0.55 for Q4 were 224% higher than the prior-year quarter's $0.17 per share. GAAP EPS of $1.05 for Q4 were 13% lower than the prior-year quarter's $1.21 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 74.4%, 90 basis points better than the prior-year quarter. Operating margin was 25.6%, 210 basis points worse than the prior-year quarter. Net margin was 26.7%, 250 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $512.2 million. On the bottom line, the average EPS estimate is -$0.38.
Next year's average estimate for revenue is $4.09 billion. The average EPS estimate is $1.12.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 1,936 members out of 2,225 rating the stock outperform, and 289 members rating it underperform. Among 548 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 471 give Electronic Arts a green thumbs-up, and 77 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 $18.81.
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