If you want your stock price to have a strong day on the exchange, make a lot of money while also showing that you know how to make a lot of money again tomorrow. That’s what publisher Electronic Arts is doing.
More EA news
Following its third-quarter financial results yesterday, EA’s stock price is up more than 13 percent to $54.80. That’s its highest price since 2007, and analysts — like R.W. Baird’s Colin Sebastian — believe it could go even higher. This surge is largely due to the game company reporting better-than-expected revenues and earnings. During the holiday quarter, EA generated $1.43 billion in spending while Wall Street was only anticipating $1.29 billion.
[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":1651240,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"games,","session":"C"}']“[EA’s earnings per share] of $1.22 was also well above the [market] consensus of 92 cents due to accelerating digital revenues and the surprise strength in last-generation console sales as well as a one-time deferred revenue boost of $50 million from EA’s NHL franchise,” Sebastian wrote in a note to investors.
The publisher has established itself as one of the strongest companies in gaming by keeping costs down, by developing big releases in its key franchises, and by embracing digital. All of this helped EA to finish 2014 as the No. 1 publisher in terms of cash made on the PlayStation 4 and Xbox One systems.
Activision, Ubisoft, and Take-Two are all also having strong years, but EA is outperforming its competition thanks to its results in several different gaming sectors.
Analysts are especially excited about EA’s outlook for the next few quarters as well as long term.
“Digital remains a bright spot,” wrote Sebastian. “Digital revenues grew 34 percent year-over-year to $693 million, with key areas of strength from subscriptions and advertising, extra content, and full-game downloads.”
During a conference call with investors, EA said that around 15 percent of full game sales comes from console digital. On top of that, the in-game purchase business model for EA Sports’ lineup of Ultimate Team games saw an 82 percent year-over-year increase.
“Mobile grew 13 percent year-over-year to $139 million,” wrote Sebastian. “With EA’s mobile portfolio averaging over 160 million monthly active users for Q3.”
The company has proven that it can thrive with digital games and mobile, and that will help ensure it remains relevant as the industry slowly moves on to either a next-generation of consoles or something completely different.
[aditude-amp id="medium1" targeting='{"env":"staging","page_type":"article","post_id":1651240,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"games,","session":"C"}']
For the more immediate future, games like Battlefield: Hardline and Star Wars: Battlefront will likely help EA continue to thrive.