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EA Q3 Earnings Review: New Launches Drive Growth

Electronic Arts ( EA ) posted strong fiscal third quarter results on Tuesday, January 31. For the three months ended December 31st, the company reported net sales of $2.07 billion, an increase of 15% over the prior year quarter, and beat market expectations of $2.05 billion. On a GAAP basis, the company reported revenues of $1.15 billion, an increase of 7% over the prior year quarter. The surge in net sales was driven by higher digital revenues, which increased 36% over the last year period. The growth in the top line boosted the company's bottom line as well, with net income of $2.58 per share beating the market expectations of $2.30 a share.

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Digital content continues to drive the top line growth for EA, with its revenues increasing 20% over the prior year quarter to $685 million. In the quarter ended December 31st, Xbox and Playstation contributed almost 69% of the company's total revenues while 13% of the total revenues came from mobile platforms, an increase of 1% over the prior year quarter.

Digital content continues to drive the top line growth for EA, with its revenues increasing 20% over the prior year quarter to $685 million. In the quarter ended December 31st, Xbox and Playstation contributed almost 69% of the company's total revenues while 13% of the total revenues came from mobile platforms, an increase of 1% over the prior year quarter.

Growth in revenues from digital content helped EA cut down its operating loss from $45 million in Q3 FY'16 to $1 million in the last quarter. Moreover, the company reported breakeven net earnings per share, against a loss of 45 cents per share in the prior year quarter.

The Way Forward

Electronic Arts is confident that its strong lineup of titles will continue to drive growth in the coming few months. As a result, the company expects fourth quarter GAAP net revenues of around $1.5 billion, which would imply growth of 15% y-o-y. The expected launches of Mass Effect: Andromeda as well as expansion packs for Battlefield 1 are likely to augment growth for the company.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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