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Sports Titles Helped Electronic Arts Exceed Analyst Expectations

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Dec. 4 2020, Updated 10:52 a.m. ET

Electronic Arts beat analyst expectations with 2Q16 results

Electronic Arts (EA), a video game maker that generates its revenues primarily from packaged goods and content in the digital space, was the latest to announce fiscal 2Q16 earnings in the current earnings season. It released its earnings on October 29, 2015.

The company’s revenues and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $1.17 billion and $0.65, respectively, beat analyst expectations by $50 million and $0.20, respectively.

However, on a GAAP basis, the company reported a loss of $140 million in 2Q16 compared to $3 million profit in 2Q15.

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Sports titles led EA’s growth in 2Q16

In September 2015, EA launched FIFA 16 and NHL 16. According to the NPD Group, and as the chart above shows, both made the Top 10 Games list for September 2015. Madden NFL 16, an American football simulator launched in August 2015, made it to the top two games in both August and September 2015. Activision Blizzard’s (ATVI) Destiny also made it onto the Top 10 Games list for September 2015.

In 2014, Madden NFL 15 sold more than 6 million units worldwide. Madden NFL 16, within five days of its release in the United States, went on to become the number-one seller.

FIFA 16’s contribution to EA’s revenues will be more prominent in fiscal 3Q16, as it was launched just a week before the end of fiscal 2Q16. However, continued demand for its earlier editions cannot be ruled out and thus has contributed to EA’s revenues.

Electronic Arts continues to be top publisher on major gaming platforms

According to EA, in fiscal 2Q16, it continued to be the world’s top publisher on Sony (SNE) PlayStation and Microsoft (MSFT) Xbox consoles. It also held this position in fiscal 2014. EA stated that it’s the top publisher in terms of software sales for home consoles.

You can invest in the PowerShares QQQ Trust, Series 1 ETF (QQQ) to gain exposure to Electronic Arts. EA makes up about 0.35% of QQQ.

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