Electronic Arts have revealed its third-quarter adjusted revenue and profit and while sales of the Titanfall 2 didn’t meet expectations, the company did manage to beat analysts’ estimates thanks to strong sales of Battlefield 1 and other titles.
The company has a history of particularly strong fourth quarter and they are expected to post strong digital sales for the period. Despite this, the company’s stock traded 1.7 per cent lower at $82 in extended trading on Tuesday. Numbers indicate that EA’s digital sales rose 20.4 per cent to $685 million in the third quarter ended December 31 as players increasingly buy games online rather than physical copies at retail stores.
EA launched its highly anticipated titles – “Battlefield 1” and “Titanfall 2” – in October and prior to that it released “FIFA 17” at the of September. The titles were launched at a time when other publishers also release their top-notch titles including Activision Blizzard Inc’s “Call of Duty: Infinite Warfare” and Ubisoft Entertainment SA’s “Watch Dogs 2”.
While competition does take a bit out of company’s revenue, EA managed to increase its revenue by 7.4 per cent to $1.15 billion and on an adjusted basis, revenue was $2.07 billion, edging past analysts’ average estimate of $2.05 billion. The company’s net loss narrowed to $1 million from $45 million a year earlier. On a per share basis, EA broke even in the latest quarter, compared with a loss of 14 cents a year ago.
EA forecast current-quarter profit of $1.64 per share and adjusted revenue of $1.08 billion. Analysts on average were expecting revenue of $1.11 billion. EA has stopped reporting non-GAAP measures that adjust for deferred revenue, as it has done since fiscal 2008, to comply with stricter guidelines by the U.S. Securities and Exchange Commission.
US financial regulators have issued guidelines requiring deferred revenue from games with online components to be accounted for over however long people play the games – typically six to nine months.