Electronic Arts Inc. (NASDAQ:EA) stock rallies 12.45% (As on May 11, 11:22:27 AM UTC-4, Source: Google Finance) despite the company forecast first-quarter adjusted sales below estimates, as it braces for weaker sales of its video gaming titles in a post-lockdown world. Earlier, the company said it would pull the plug on its popular video-game franchise, FIFA, as it was ending a decades old partnership with the world’s soccer governing body. The live services revenue, which makes up most of EA’s sales, rose to $1.39 billion in the quarter from $1.1 billion a year earlier. Net bookings for fiscal 2022 was $7.515 billion, up 21% year-over-year. Live services and other net bookings were up 17% year-over-year and represent 71% of total net bookings in fiscal 2022. The EA player network grew 16% year-over-year to more than 580 million unique active accounts.
EA in the fourth quarter of FY 22 has reported the adjusted earnings per share of $1.46, beating the analysts’ estimates for the adjusted earnings per share of $1.43, according to Refinitiv data. The company had reported the adjusted revenue of $1.75 billion in the fourth quarter of FY 22, missing the analysts’ estimates for revenue of $1.78 billion.
EA forecast current-quarter adjusted sales of between $1.20 billion and $1.25 billion, compared with analysts’ average expectations of $1.44 billion, according to Refinitiv IBES data. For the first quarter of 2023, the company expects Net income is expected to be approximately $216 to $240 million, Diluted earnings per share is expected to be approximately $0.76 to $0.85 and Net bookings is expected to be approximately $1.200 to $1.250 billion.
For fiscal 2023, the company expects net revenue to be approximately $7.600 to $7.800 billion, Change in deferred net revenue (online-enabled games) is expected to be approximately $300 million, Net income is expected to be approximately $793 to $815 million, Diluted earnings per share is expected to be approximately $2.79 to $2.87 and Operating cash flow is expected to be approximately $1.600 to $1.650 billion.
Additionally, the company has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock, which represents a 12% increase from prior quarter. EA repurchased 2.5 million shares for $325 million during the quarter, bringing the total for the fiscal year to 9.5 million shares for $1.300 billion. Net cash provided by operating activities was $444 million for the quarter and $1.899 billion for the fiscal year.