Electronic Arts Set to Reveal Third-Quarter Earnings Amid Market Challenges
EA’s upcoming fiscal report shows promise in profit, but shares have struggled to keep pace with rivals.
Electronic Arts Inc. (EA), based in Redwood City, California, stands as a significant player in interactive entertainment. This company develops, markets, publishes, and provides games and other content for various platforms, including consoles, PCs, mobile devices, and tablets. With a market capitalization of $36.9 billion, EA covers several gaming genres, such as sports, racing, and action, featuring popular franchises like EA SPORTS FC, Battlefield, NFL, and F1. The company is set to announce its fiscal third-quarter earnings for 2025 on Tuesday, February 4.
As the earnings date approaches, analysts forecast that EA will report a profit of $2.89 per share on a diluted basis, marking a 15.1% increase from $2.51 per share in the same quarter last year. Notably, EA has outperformed consensus estimates in three of the last four quarters, although it did miss expectations once during that span.
For the entire fiscal year, predictions suggest that EA will report earnings per share (EPS) of $5.83, reflecting a 12.1% rise from $5.20 in fiscal 2024. Looking ahead, analysts anticipate an 11.5% increase year over year, projecting EPS to reach $6.50 in fiscal 2026.
However, EA’s stock has struggled recently. Over the past 52 weeks, its shares have only risen by 2.3%, significantly trailing the S&P 500, which has gained 21.8%. The underperformance is also evident in relation to the Communication Services Select Sector SPDR Fund (XLC), which has risen by 30% during the same period.
Several factors contribute to EA’s challenges. Increased competition within the gaming sector, difficulties in player engagement and retention for some franchises, and disappointing monetization strategies for freemium games have all impacted its performance. Slow growth in traditional game sales has further complicated the situation.
On October 29, EA shares gained 1% following the release of its Q2 results, where the adjusted EPS of $2.15 exceeded Wall Street’s expectations of $2.03. The company reported revenue of $2 billion, an increase of 5.8% year over year. For the full fiscal year, EA forecasts adjusted EPS to range between $3.82 and $4.33, with total revenue expected between $7.4 billion and $7.7 billion.
Overall, analysts maintain a moderately bullish stance on EA’s stock. Out of 25 analysts following the stock, 12 recommend a “Strong Buy,” two suggest a “Moderate Buy,” and 11 have issued a “Hold” rating. The average price target set by analysts stands at $165.25, which indicates a potential upside of 17.3% from current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For further details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
