Electronic Arts Stock Drops After Giving Guidance For Its March Quarter

Although Electronic Arts’ digital share went up this quarter with total net revenue topping $1.59 billion and total net bookings reaching $1.98 billion, the company’s guidance for the current quarter was $1.152 billion in adjusted revenue, which is below the $1.2 billion street average. This has led EA’s stock to drop by 6%.

If you don’t know, EA’s live-service mechanics brought in $993 million of the company’s total net bookings last quarter. Well, said number has increased, insofar that live-service mechanics now make up 77% of EA’s total net bookings.

Despite live-service money helping EA, website barrons.com reports that things aren’t as rosy as one would think in that EA’s guidance for the current quarter was slightly shy of hitting the set goal:

“Electronic Arts stock was down about 6% in after-hours trading Thursday after the game maker gave guidance for its March quarter slightly below analyst expectations.

 

Electronic Arts (ticker: EA) reported adjusted revenue of $1.98 billion for its fiscal third-quarter, versus the analyst consensus of $1.97 billion, according to FactSet. Its guidance for the current quarter was $1.152 billion in adjusted revenue, below the $1.2 billion Street average.”

According to website marketwatch.com, it is said that Jefferies analyst Alex Giaimo expected EA’s quarter to be an “A,” but instead, he says the whole run was a “B+ quarter.”

Giaimo also had this to say:

“We believe bullish investors were looking for ~$2.65 in EPS and a better 4Q guide. Nonetheless, we see no red flags in the results and note that core franchises continue to drive healthy Live Services growth (+27% in 3Q).”

It looks like Giaimo isn’t the only one mesmerized by the whole live-service shtick. According to Barrons, the site says Wall Street analysts are “generally positive on EA.” It is said that around 67% have ratings of “Buy,” while 33% of the opposite side sport a “Hold” rating.

Lastly, the aforesaid falls in line with CEO Andrew Wilson’s take during the earnings release in that he looks at live-service mechanics across multiple titles as being an excellent thing:

“It was an excellent third quarter, with our new games and live services delighting more players around the world.”

Although not surprising, expect more live-service mechanics in EA games from here on out.

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