Star Wars game helps boost Electronic Arts’ sales and earnings
Shares in video games maker Electronic Arts (EA) shot up by over seven per cent in after hours trading last night, after the US firm revealed quarterly revenue and profit had come in ahead of analysts' expectations.
The company reported revenue of $924m (£640m) for the fourth quarter of its 2016 financial year, up from $896m in the same period of the previous year – and beating Thomson Reuters forecasts of $888.8m.
EA said its Star Wars Battlefront game, which launched in November last year, had sold more than 14m units in the year ended 31 March. The science fiction franchise proved more helpful to EA than to Disney, which last night saw its stock tumble after it failed to meet analyst expectations in the second quarter – despite the massive success of the most recent Star Wars film, which was released during the period.
Earnings per share (EPS), excluding exceptional items, came in at $0.50 in the fourth quarter, compared to $0.39 last year, and well ahead of projected EPS of $0.42.
Revenue for the full year was $4.57bn, up from $4.32bn in 2015, and profit rose from $806m to $1.02bn.
EA chief executive Andrew Wilson said 2016 was a "phenomenal year for Electronic Arts as we connected hundreds of millions of players to great new games, and helped them connect with each other through rich and dynamic live services".
“The year ahead is packed with excitement," he added. "Fans are thrilled with the intense action and epic scale of Battlefield 1, our EA SPORTS titles will take major leaps in innovation, and we’ll bring new experiences from our most popular brands to more players on more devices.”
The group has forecast that it will report a loss of around $0.05 per share for the first quarter of the 2017 fiscal year, on revenue of $640m. The loss is predicted because the company is set to release just one title during the three months to 30 June – Mirror's Edge Catalyst.
However, full year revenue is expected to rise to $4.9bn, with EPS of around $3.50.
“Leveraging our great portfolio of brands and live services has enabled us to break records across our key financial metrics," said EA's finance chief Blake Jorgensen. "We expect to drive strong revenue, earnings and cash flow growth into the future.”