EA Games Beats Estimates on Digital Downloads
The publisher of 'FIFA' and 'Madden' was expected to have a slow spring.
EA Games exceeded Wall Street's expectations for the quarter ending June 30, indicating strong digital growth for the maker of FIFA, Madden and Battlefield.
The game publisher pulled in $682 million in adjusted revenue, well above the $652.5 million consensus estimate, according to analysts surveyed by Thomson Reuters. Adjusted earnings per share came in at $0.07, two cents above guidance of $0.05.
Revenues were still down 1.5 percent from the previous year, which benefited from deferred income from Chinese players' online purchases in FIFA Online 3 and top line run-over from Battlefield Hardline.
With school in session and the weather outside getting more inviting, the first fiscal quarter typically isn't a strong one for the gaming industry, so the higher revenues come as a welcome surprise to analysts. The high-margin digital download business, which doesn't require publishers to make a physical product, helped the Redwood City, Calif.-based company beat estimates.
Analysts are still concerned about EA's reliance on blockbuster titles, however, as opposed to mobile gaming.
"The casual gamer demographic has been a major contributor to recent growth of the video game market," Morningstar equity analyst Neil Macker wrote in a note to investors. "Despite recent investments, EA has traditionally been weak in the casual gaming segment."