Video game publisher Electronic Arts (NASDAQ: EA) will be announcing earnings results tomorrow after the bell. Here’s what to look for.
Electronic Arts missed analysts’ revenue expectations by 4.6% last quarter, reporting revenues of $1.88 billion, down 3.2% year on year. It was a mixed quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations but a significant miss of analysts’ EBITDA estimates.
Is Electronic Arts a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Electronic Arts’s revenue to be flat year on year at $1.76 billion, improving from the 5.1% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.08 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Electronic Arts has missed Wall Street’s revenue estimates four times over the last two years.
Looking at Electronic Arts’s peers in the consumer internet segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Roblox delivered year-on-year revenue growth of 29.2%, beating analysts’ expectations by 3.3%, and Alphabet reported revenues up 12%, topping estimates by 1.2%. Roblox traded up 10.6% following the results while Alphabet was also up 1.8%.
Read our full analysis of Roblox’s results here and Alphabet’s results here.
There has been positive sentiment among investors in the consumer internet segment, with share prices up 18% on average over the last month. Electronic Arts is up 12.2% during the same time and is heading into earnings with an average analyst price target of $149.98 (compared to the current share price of $151.10).
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