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EA Posts Better Than Expected Earnings on Battlefield Hardline Release, Digital Sales

EA Posts Better-Than-Expected Earnings on Battlefield Hardline Release, Digital Sales

By Reuters | Updated: 6 May 2015 09:55 IST

Video game publisher Electronic Arts Inc, known for titles such as "FIFA" and "Madden NFL", posted better-than-expected quarterly earnings and revenue on Tuesday, helped by strong digital sales and the release of "Battlefield Hardline".

EA, whose shares rose as much as 6.5 percent to $62.98 in extended trading, also announced a buyback programme of up to $1 billion and forecast full-year earnings above analyst estimates.

EA's digital business, which includes software distributed through the Internet, now accounts for more than half of the company's revenue and will continue to grow, Chief Financial Officer Blake Jorgensen told Reuters.

EA forecast an adjusted profit of $2.75 per share for the year ending March 31, above the average estimate of $2.64, according to Thomson Reuters I/B/E/S.

"The guidance is clean and really high ... their margins are going up and their costs are staying low," Wedbush Securities analyst Michael Pachter said.

However, EA forecast a breakeven current quarter on an adjusted basis. Analysts on average were expecting a profit of 19 cents per share.

Jorgensen said EA would not release any games in the current quarter. "Consensus was really built on last year's numbers. The Street didn't have full visibility to our title plan yet," he said.

Revenue will be more concentrated in the second half of the fiscal year than it was last year, he said.

"Star Wars Battlefront", which comes out in mid-November before the Star Wars movie, will be EA's biggest title this year, he added.

Shift to mobile
EA has boosted revenue by offering its popular PC and online games on mobile devices, using a high-margin "freemium" model in which games are available for free but are monetized through advertising or by charging gamers for additional features.

EA and Visceral Games launched "Battlefield Hardline" in mid-March, and the physical retail version topped research firm NPD Group's March Top 10 Games list.

More than 30 million sessions of "Battlefield Hardline" were played in the quarter, the company said.

EA's net income rose to $395 million, or $1.19 per share, for the fourth quarter ended March 31, from $367 million, or $1.15 per share, a year earlier.

Revenue rose 5.5 percent to $1.19 billion.

On an adjusted basis, EA earned 39 cents per share on revenue of $896 million. Analysts expected a profit of 25 cents per share and revenue of $850.2 million.

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