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Electronic Arts reported better-than-expected earnings today for the fourth-fiscal quarter ended March 31, as live operations and original titles carried it through a relatively quiet quarter.

The Redwood City, California-based video game giant reported net income of $76 million, or 26 cents a share, on revenues of $1.35 billion, compared with net income of $418 million, or $1.43 a share, on revenue of $1.39 billion. About 81% of sales came from live operations for existing games such as FIFA 21.

During the quarter, EA had a light slate of games and less of a boost from the pandemic, which gave the industry a big boost as people played games while sheltering in place. However, when viewed from the prism of bookings, the picture looked better. Net bookings for the quarter were $1.49 billion, 18% above a year ago and above both EA’s guidance and the analyst consensus expectations of $1.39 billion. EA extended its guidance for the full year because of high expectations around upcoming games like Battlefield. Bookings reflect actual cash coming into the company, while revenues don’t include numbers that are yet to be realized, such as virtual goods that have been purchased but not used yet in game.

For the full fiscal year ended March 31, EA reported net income of $837 million on revenue of $5.6 billion. EA said annual net bookings were $6.19 billion, up 15% from a year earlier and more than $600 million above its original expectations and above analyst expectations of $6.09 billion. In after-hours trading, EA’s stock is down 1.4% to $139.37 a share.

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Analysts expected EA’s adjusted earnings per share for the quarter to be $1.05, based on a consensus from analysts, on revenues of $1.4 billion. On a GAAP basis, the net loss was expected to be $19 million, or 7 cents a share. EA’s non-GAAP earnings per share of $1.23 came in above the analyst consensus.

During the quarter, EA closed its acquisition of Glu Mobile for $2.4 billion. It also launched It Takes Two, a smaller EA Originals game from third-party developer Josef Faris and his Hazelight studio. It received good reviews, and it sold over 1 million copies less than a month after its March 26 release.

In the current first-fiscal quarter ending June 30, EA is launching Mass Effect: Legendary Edition May 14. This RPG series is a fan-favorite, and BioWare is remastering the trilogy in this package for PC and PlayStation and Xbox consoles.

Mass Effect: Legendary Edition.

Above: Mass Effect: Legendary Edition launches May 14.

Image Credit: Electronic Arts

“Our teams have done incredible work over the last year to deliver amazing experiences during a very challenging time for everyone around the world,” said CEO Andrew Wilson in a statement. “With tremendous engagement across our portfolio, we delivered a record year for Electronic Arts. We’re now accelerating in FY22, powered by expansion of our blockbuster franchises to more platforms and geographies, a deep pipeline of new content, and recent acquisitions that will be catalysts for further growth.”

With Glu Mobile, EA should be in a better position to execute strategies like its rival Activision Blizzard has done with Call of Duty. Both Call of Duty: Mobile and Call of Duty: Warzone have served as free-to-play games that garner a massive audience and funnel the users toward a premium product like Call of Duty: Black Ops — Cold War. These keep players glued to the Call of Duty franchise year-round, and they can help stave off competitors.

With Battlefield, EA’s approach will be different. Its free-to-play mobile Battlefield game will likely launch in 2022, which is after the Battlefield PC and console game launches later this year.

Noble stallions.

Above: Noble stallions await in It Takes Two.

Image Credit: Steam

For the fiscal year ending March 31, EA had previously expected revenue to be approximately $5.6 billion. Diluted earnings per share was expected to be approximately $2.54. During the fiscal year, EA delivered 13 games and saw more than 42 million new players join its network.

FIFA 21, life to date, has more than 25 million console/PC players. FIFA Ultimate Team players grew 16% year-over-year and FUT matches were up 180%. Apex Legends has more than 100 million players life to date on console/PC, and Season 8 had more than 12 million weekly average players.

A record number of new players joined Madden NFL on console/PC during fiscal 21. The Sims 4, life to date, has almost 36 million players and delivered its sixth consecutive year of franchise growth. EA said that net cash provided by operating activities was $371 million for the quarter and $1.934 billion for the fiscal year.

Most of EA’s sales in the quarter came from the consoles, followed by the PC and then mobile.

A look ahead

For the upcoming fiscal year ending March 31, 2022, EA forecast that net income will be $390 million, or $1.34 a share, on revenues of $6.8 billion. Operating cash flow is expected to be $1.75 billion, and bookings will be $7.3 billion. Analysts were expecting full-year guidance of $6.5 billion. That’s a reflection of EA’s confidence around big games coming such as Battlefield.

For the first fiscal quarter ending June 30, EA forecast that net income will be $70 million, or 24 cents a share, on revenues of $1.475 billion. Net bookings are expected to be $1.25 billion and non-GAAP earnings per share are expected to be 55 cents. EA said that it expects consolidation of results from recent acquisitions will have an impact on the quarter. Analysts had expected earnings per share of 60 cents on bookings of $1.11 billion.

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