Electronic Arts (NASDAQ: EA) shares rose by 5% at the opening bell on Wednesday after reporting its fourth quarter financial results on Wednesday. EA’s strong quarter also led the Company to provide a better-than-expected guidance.
For the fourth quarter, EA reported earnings of USD 0.69 per share on revenue of USD 1.23 Billion. FactSet analysts expected adjusted earnings of USD 0.97 per share on revenue of USD 1.2 Billion. EA did not provide adjusted earnings this quarter.
Despite EA’s stronger-than-expected quarter, the Company’s financials has slipped in the past year. EA’s net income fell from USD 607 Million to USD 209 Million for the quarter. Revenue also fell from USD 1.58 Billion the same quarter a year ago.
Digital net bookings for the year was USD 3.72 Billion, increasing by 5% year-over-year. The growth in net bookings was led by the active player engagement in EA’s FIFA and Sims 4. During the fiscal year, EA reported that more than 45 million unique players engaged in FIFA 19 and FIFA 18 on console and PC. Meanwhile, active players in Sims 4 increased by 35% year-over-year.
During the quarter, EA also launched two new original IP titles, Apex Legends and Anthem. In particular, EA had major success with Apex Legends. Within the first month of launch, it was reported that Apex Legends had over 50 million players signup. Apex Legends also delivered USD 92 Million in revenue during its first month.
“We ended our fiscal year with strong growth, driven by our live services business which continued to provide a very large, stable and profitable source of net bookings,” said Chief Operating Officer and Chief Financial Officer Blake Jorgensen. “Looking ahead, we will bring games to an extraordinary variety of players in fiscal 2020 and deliver on our commitment to players with deep live services content for Ultimate Team, Apex Legends, The Sims 4, Anthem and Battlefield V.”
As for the first quarter, EA is forecasting revenue of USD 1.13 Billion. Net income is expected to be USD 1.76 Billion or earnings of USD 5.84 per share. For fiscal 2020, EA expects net revenue to be approximately USD 5.37 Billion. Net income is expected to be USD 2.59 Billion or diluted earnings of USD 8.56 per share.
“FY20 will be a year of continued growth for our industry, and we’re excited to bring more great entertainment to the expanding audience around the world,” said Chief Executive Officer Andrew Wilson. “Players are engaging with games in more ways than ever before. We’re committed to meeting them where they are with a broad portfolio of amazing new games and live services, choice of engagement models including free-to-play and subscriptions, and new opportunities to play, compete and watch.”