Electronic Arts Inc. shares rose slightly in the extended session Tuesday after the videogame publisher reported solid revenue growth that comfortably beat Wall Street’s forecast.
The company posted strong first-quarter sales despite broader concerns that the pandemic boom in videogames could disappear this year. EA EA stock closed down 1.5% at $128.89 in the regular session.
The videogame giant reported net income of $311 million, or earnings of $1.11 a share, compared to net income of $204 million, or earnings of 71 cents a share in the same period last year.
The company reported revenue of $1.767 billion, compared with revenue of $1.551 billion in the prior year’s quarter.
Analysts tracked by FactSet had forecast revenue of $1.259 billion and earnings of 89 cents a share, or 33 cents a share on an adjusted basis.
Also see: The pandemic boom in videogames is expected to disappear in 2022
Bookings, which account for deferred revenue, reached $7.478 billion over the trailing past 12 months, a 22% year-over-year increase according to Electronic Arts. Net bookings for the quarter were $1.299 billion, compared with $1.336 billion in the year-ago quarter.
Electronic Arts’ FIFA franchise and the successful launch of the company’s latest “F1” game drove net bookings outperformance, according to the company’s CFO Chris Suh, in a statement.
The publisher of the “Madden NFL” franchise and action titles like “Apex Legends” and “Battlefield 2042” also declared a quarterly cash dividend of 19 cents a share.
For the second quarter, Electronic Arts expects revenue of $1.85 billion to $1.9 billion, net income of $220 million to $242 million and earnings of 78 cents a share to 86 cents a share. Analysts surveyed by FactSet have forecast sales of $1.842 billion, net income of $403 million and earnings of 84 cents a share, or $1.46 a share on an adjusted basis.
For the full year, Electronic Arts gave revenue guidance of $7.6 billion to $7.8 billion, net income of $793 million to $815 million and earnings of $2.79 to $2.87 a share. Analysts tracked by FactSet forecast revenue of $7.981 billion, net income of $2.032 billion and earnings of $3.52 a share, or $7.17 on an adjusted basis.
“EA delivered strong results in Q1 with our growing player network deeply engaged in new games and live services,” said CEO Andrew Wilson, in a statement. “Our expanding EA Sports portfolio and owned-IP franchises continue to power resilience and longevity in our business.”
The pandemic boom enjoyed by the videogame industry in 2021 is expected to disappear in 2022, according to a number of analysts. U.S. consumer spending on videogame products decreased 13% to $12.35 billion during the second quarter, according to a report released Tuesday by the NPD Group.
The EA player network, however, grew to nearly 600 million active accounts at the end of the quarter. “Games are the social networks of the future,” said Wilson, during a conference call to discuss the results.
“Even amongst market uncertainty, more people than ever before are turning to games,” Wilson added.
Earlier this year, Electronic Arts and the Federation Internationale de Football Association ended their longstanding partnership after failing to strike a new licensing deal for the hugely successful FIFA soccer game.
Hours before its earnings report, Electronic Arts announced a multi-year sponsorship with Spain’s LaLiga professional soccer league, which is home to powerhouse teams such as Barcelona and Real Madrid. The partnership between the company’s EA Sports FC division and LaLiga will include naming rights for all LaLiga competitions.
The partnership will encompass the first and second divisions of LaLiga, LaLiga Promises, which is the league’s annual youth tournament, and eLaLiga.
See now: EA splits chief technology officer role as Ken Moss heads for the doors
“The new sponsorship deal will arrive at a key time for Electronic Arts’ brand development, with 2023 set to see the arrival of EA Sports’ first football game since breaking away from the FIFA brand,” wrote Benchmark analyst Mike Hickey, in a note released on Tuesday. “After FIFA 23’s release later this year, EA will rebrand its football games as EA Sports FC, ending a near-30-year relationship with the footballing body.”
Electronic Arts shares have fallen 2% this year, compared to the S&P 500 Index’s SPX 13.8% decline.
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