NEW YORK:Wall Street analysts expect Electronic Arts Inc to report record quarterly revenue on Tuesday, as gamers stuck at home due to fresh pandemic-induced restrictions boost demand for its sports titles "Madden NFL 21" and "FIFA 21" in the crucial holiday shopping season.
Investors will also be looking for details on the new version of its first person shooter game "Battlefield" and racing title "Need For Speed". Delays in "FIFA" and "Madden NFL 21" updates had hurt the company's sales last year.
"EA intends to launch 6 next gen games in FY2022, headlined by a new Battlefield game which is expected to anchor a more robust CY2021/FY2022 slate," Stifel analyst Drew Crum said, adding that this year the company did not have a single action release.
THE CONTEXT
EA and rivals Activision Blizzard Inc and Take-Two Interactive Software Inc have benefited from a surge in videogame sales during the pandemic.
But faced with fierce competition, publishers need to keep refreshing their top-selling titles to attract new gamers and retain old ones. EA's quarterly results will offer a clue on how its games held up against popular titles such as Activision's "Call of Duty: Black Ops: Cold War" and Take Two's "NBA 2K21".
THE FUNDAMENTALS
* The Redwood City, California-based company is expected to report a 20.7% increase in revenue to $2.387 billion from $ 1.98 billion a year ago, according to the mean estimate of 25 analysts, based on Refinitiv data.
* The analyst mean estimate for Electronic Arts is for earnings of $2.96 per share. For the same quarter last year, the company reported earnings of $2.52 per share.
WALL STREET SENTIMENT
* The current average analyst rating on the stock is "buy" and the breakdown of recommendations is 20 "strong buy" or "buy," 13 "hold" and no "sell" or "strong sell."
* The mean earnings estimate of analysts fell by about 32% in the last three months.
* Wall Street's median 12-month price target for Electronic Arts Inc is $150, about 4.7% above its last closing price of $143.01.
Reuters
Tue Feb 02 2021
The Electronic Arts Inc., logo is displayed on a screen during a PlayStation 4 Pro launch event in New York City, U.S., September 7, 2016. REUTERS pic
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