Why Electronic Arts Fell After Posting a Great Quarter

Wall Street analysts can be a tough crowd to please.

Demitrios Kalogeropoulos
Demitrios Kalogeropoulos
Jul 24, 2014 at 7:52PM
Technology and Telecom

Electronic Arts' (NASDAQ:EA) stock dropped by as much as 6% following the video game publisher's latest quarterly earnings announcement. But the sell-off wasn't due to any bad surprises in the quarter that just closed.

In fact, sales improved by 57% over the prior year, while profitability jumped a full six percentage points to reach an impressive 70%. Both the revenue and profit figures were well above EA's guidance -- and ahead of Wall Street's expectations, too.

In the video below, Fool contributor Demitrios Kalogeropoulos discusses the recent results, noting that they were powered by a 28% spike in digital receipts, and a few hit game launches. However, investors weren't happy to hear that the release of two of EA's highly anticipated games, Battlefield Hardline and Dragon Age: Inquisition, would be delayed. That shouldn't worry long-term shareholders, Demitrios argues, as a short delay will likely just push sales and profits from these games into future quarters. Watch the video for Demitrios' full take.