tiprankstipranks
Market News

Why Did Electronic Arts Jump 3% Despite Weak Q4 Performance?

Video game major Electronic Arts Inc. (NASDAQ: EA) has reported weaker-than-expected results for the fourth quarter ended March 31, 2022.

Interestingly, following the results, shares of the company grew more than 3% to close at $115 in Tuesday’s extended trading session.

Revenue & Earnings

EA reported net bookings of $1.75 billion for the quarter, up 17.5% from the same quarter last year. The figure, however, failed to surpass the consensus estimate of $1.78 billion.

Earnings per share (EPS) for the quarter rose 207.7% year-over-year to $0.80 but lagged the consensus estimate of $1.44.

Other Operating Metrics

The company’s net cash generation from operating activities improved 19.7% year-over-year to $444 million.

Net revenues at the end of the quarter stood at $1.8 billion, up 35.6% from the year-ago quarter.

Share Repurchase Activities

During the quarter, EA repurchased 2.5 million shares for $325 million. Further, the company hiked its quarterly dividend by 12% from the prior year to $0.19. The dividend will be paid on June 22, 2022, to shareholders of record as of the close of business on June 8, 2022.

Outlook

For the Fiscal Year 2023, the company forecasts net booking between $7.9 billion and $8.1 billion. The consensus for the same is pegged at $8.02 billion.

Management Commentary

The CEO of Electronic Arts, Andrew Wilson, said, “FY22 was a record year, with hundreds of millions of players around the world joining in our games to play, watch, and create with one another. With amazing games, built around powerful IP, made by incredibly talented teams, and outstanding engagement in our live services, FY23 is set to be a year of innovation and growth for Electronic Arts.”

Stock Rating

Consensus among analysts is a Strong Buy based on six Buys and one Hold. EA’s average price target of $160 implies upside potential of 43.4% from current levels. Shares have declined 21.1% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into EA’s performance this quarter.

According to the tool, the EA website recorded an 8.46% monthly fall in global visits in April, compared to March.

EA’s falling footfall on its website sequentially acted as a timely precursor to its weak quarterly results. This signifies that TipRanks’ website traffic tool helps in making reliable predictions about a company’s performance.

Conclusion

EA’s robust growth in key operational metrics over the past year and upbeat outlook for the Fiscal Year 2023 can make it a compelling choice for investors.

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash.

Read full Disclaimer & Disclosure

Related News:
Lemonade’s Q1 Results Were Sweet, but Outlook Leaves a Sour Taste
Why Did Palantir Stock Lose 21% on Monday?
Musk’s Twitter Offer is Risky, Says Activist Short-Seller

Tired of arriving late to the Big Returns Party?​
Most investors don’t have major gainers like TSLA or NVDA on their radar from the start.
The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype.
​​For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate.​
Learn More