Electronic Arts (EA.US) is down more than 17% in pre-market trading following the release of preliminary financial results for the previous quarter and the company's downward revision of its full-year forecast for fiscal year 2024/25. Weaker performance of key sports titles and a disappointing launch of the new title of Dragon Age series led to the company's revised expectations.
As a result, for Q3 24/25, the company estimates that revenues will amount to $1.88 billion, significantly lower than the projected $1.99 billion. At the same time, the consensus expected a result of $2.37 billion. Additionally, the company points to a lower level of net bookings, amounting to $2.22 billion (compared to the forecasted $2.51 billion), indicating that the issues with the popularity of the company's titles are more than just a one-time deviation.
Consequently, the company has revised its full-year forecast, now expecting net bookings to decline by approximately 5-10%, compared to the previous assumption of a 0-5% increase.
The estimated EPS is $1.11, which is 5% lower than the analysts' consensus.
The disappointing results and weaker forecasts are primarily due to the underperformance of the sports games segment, which had several releases in Q3 of the fiscal year. Specifically, the stronger momentum for EA Sports FC 2025, which the company had anticipated, did not sustain post-launch, with order growth remaining in the low single-digit range. Meanwhile, Dragon Age: The Veilguard reached about 1.5 million players, nearly half of what the company had previously expected.
Preliminary results for the third quarter:
- Preliminary net bookings: $2.22 bln , estimated: $2.51 bln
- Preliminary total net revenue: $1.88 billion, estimated: $1.99 billion
- Preliminary earnings per share (EPS): approximately $1.11
EA is down more than 17% in pre-market trading following the report, falling to its lowest levels since September 2023. Source: xStation
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