(Image via Take-Two Interactive Software Inc.)
Burnaby-BC-based gaming studio
Electronic Arts Inc. (NASDAQ: EA) and rival
Take-Two Interactive Software, Inc. (NASDAQ: TTWO) gained 2.9% and 8.7% respectively in Thursday trading after they boosted their 2021 adjusted sales forecasts on strong gaming boom. Although both stocks cooled by midday Friday, their values are growing overall.
Take-Two shares advanced after the videogame publisher
reported quarterly results and boosted its booking forecast for the year.
“We experienced consistently strong engagement trends across our key franchises, underscoring the durability of our offerings and the deep relationships that we have established with new, existing, and returning players,” Strauss Zelnick, Take-Two’s chairman and chief executive officer, said in a news release.
“As a result of our better-than-expected second-quarter operating results, along with our updated forecast for the balance of the year, we are raising our net bookings guidance for the year.”
Take-Two forecast fiscal third-quarter earnings of 85 cents to 95 cents a share on revenue of $840 million (USD) to $890 million (USD) and bookings of $800 million (USD) to $850 million (USD), and $2.75 (USD) to $3 (USD) a share on revenue of $3.35 billion (USD) to $3.45 billion (USD) and bookings of $3.3 billion (USD) to $3.4 billion (USD) for the year.
Analysts had estimated third-quarter earnings of $1.16 (USD) a share on revenue of $813.2 million (USD), and bookings of $909.3 million (USD). For the year, analysts expect earnings of $4.63 (USD) a share, revenue of $3.34 billion (USD) and bookings of $3.42 billion (USD).
For fiscal Q2, Take-Two reported net income of $10.3 million (USD), or 9 cents a share, compared with $99.3 million (USD), or 86 cents a share, in the year-ago period.
Revenue rose to $858.2 million (USD) from $841.1 million (USD) in the year-ago quarter, while net bookings rose to $984.9 million (USD) from $957.5 million (USD) in the year-ago quarter.
Analysts surveyed by FactSet had forecast earnings of $1.35 (USD) a share, revenue of $786.9 million (USD), and bookings of $873.2 million (USD).
Pulling back the map a bit, we see that TTWO has increased 10.8% since this time last year, and EA stock has grown 11.9% in that time.
(Image via Electronic Arts Inc.)
Electronic Arts reported
fiscal Q2 2022 earnings of $1.02 (USD) per share, which increased 62% year over year.
Revenues increased 58.6% year over year to $1.83 billion (USD), driven by strong performances by EA SPORTS global football franchise,
Apex Legends and
Star Wars: Galaxy of Heroes.
The Zacks Consensus Estimate for earnings and revenues was pegged at $1.17 (USD) per share and $1.85 billion (USD), respectively.
Net bookings surged 103.4% year over year to $1.85 billion (USD), better than management’s guidance of $1.725 billion (USD) , driven by robust live services performance.
EA’s full-game revenues (33.8% of total revenues) soared 118.8% year over year to $617 million (USD) . Full-game download revenues increased 107% year over year to $163 million (USD). Revenues from packaged goods surged 135% year over year to $119 million (USD).
Live services and other revenues (66.2% of total revenues) rose 39.1% year over year to $1.21 billion (USD).
The company added that based on platforms, revenues from console increased 68% year over year to $714 million (USD) in the reported quarter. Revenues from PC & Other increased 51% year over year to $249 million (USD). Revenues from the mobile platform climbed 34% year over year to $188 million (USD).
As of September 30th, 2021, EA had $1.97 billion (USD) in cash and short-term investments compared with $3.72 billion (USD) as of June 30th, 2021.
Net cash provided by operating activities in the reported quarter was $64 million (USD) against net cash used in operating activities of $143 million (USD) in the previous quarter. EA repurchased 2.3 million shares for $325 million (USD) in the quarter. The company also declared a quarterly cash dividend of 17 cents per share.
As far as guidance goes, EA expects GAAP revenues of $1.750 billion (USD) and earnings of 2 cents per share. Net bookings are expected at $2.625 billion (USD) for Q3 fiscal 2022,
For fiscal 2022, EA expects revenues of $6.925 billion (USD) and earnings of $2.03 (USD) per share. The company raised net bookings expectations for the year to $7.625 billion (USD). Operating cash flow is estimated to be $1.95 billion.
EA is one of the world's largest third-party video game publishers and has transitioned from a console-based video game publisher to the one of the largest publishers on consoles, PC, and mobile. The firm owns number of large franchises, including
NHL,
Madden,
FIFA,
Battlefield,
Mass Effect,
Dragon’s Age, and
Need for Speed.
Take-Two publishes such videogame franchises as
Grand Theft Auto and
Red Dead Redemption under its Rockstar Games label, and
Borderlands, and
NBA2K under its 2K label.