Electronics Arts Jumps After Apex Legends Helps Fuel Results
(Bloomberg) -- Electronic Arts Inc. gained as much as 10 percent in late trading after the launch of the Apex Legends game helped fourth-quarter results zoom past analysts' estimates.
The company reported a profit of $1.31 a share, excluding some items, compared with a 96-cent projection. Revenue also came in ahead of predictions, though Electronic Arts' forecast for the current quarter was light.
Apex Legends, a battle-royale-style title released in February, was a bigger hit than expected. It delivered five to 10 times as much revenue as the company projected, Chief Financial Officer Blake Jorgensen said in an interview.
“Clearly, Apex was bigger than what we anticipated,” he said. “We expected a much slower ramp-up in players, and thus, revenue.”
It's a sign Electronic Arts can go toe to toe with Epic Games' Fortnite, an early battle-royale hit that has become a cultural phenomenon. Digital revenue also climbed at Electronic Arts last quarter, helping the company cope with a shift away from physical game media.
The results follow a similar pattern as those of rival Activision Blizzard Inc. earlier this week. Like Electronic Arts, beat earnings and sales estimates for its just-ended quarter. But in that case, the downbeat forecast sent Activision's shares tumbling.
Jorgensen noted that Electronic Arts' first fiscal quarter, which ends in June, is typically a slow one with no major releases. In that period last year, the company benefited from World Cup-related sales of its FIFA game -- an unusual event.
Separately, the company expanded its EA Access subscription business to Sony Corp.'s PlayStation platform. “Our goal is we'd like to have our games on all major platforms,” Jorgensen said.
The shares climbed as high as $101.96 in late trading Tuesday. Before the close, they were up 18 percent this year.
Activision and Take-Two Interactive Software Inc. also gained after the results were posted.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum
©2019 Bloomberg L.P.
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