NEW YORK (TheStreet) -- Shares of Electronic Arts (EA) - Get Report are down by 0.87% to $76.10 on Thursday morning, as the company prepares to release its fiscal 2016 second quarter earnings results after the market close today.
Analysts are expecting the video game and gaming software provider to report a year over year decline in both earnings per share and revenue for the most recent quarter.
EA has been forecast to post earnings of 45 cents per share on revenue of $1.1 billion for the September ended period.
The company's non-GAAP earnings came in at 73 cents per diluted share on revenue of $1.22 billion for the fiscal 2015 second quarter.
Electronic Arts is a Redwood City, CA-based video game distributor. Some of the company's gaming titles include NHL 16, Star Wars Battlefront, Madden NFL 16, Minions Paradise, FIFA 16 and Battlefield Hardline.
Separately, TheStreet Ratings team rates ELECTRONIC ARTS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate ELECTRONIC ARTS INC (EA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 26.92% and other important driving factors, this stock has surged by 112.66% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- ELECTRONIC ARTS INC has improved earnings per share by 26.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ELECTRONIC ARTS INC turned its bottom line around by earning $2.68 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($2.92 versus $2.68).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 31.9% when compared to the same quarter one year prior, rising from $335.00 million to $442.00 million.
- EA's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, ELECTRONIC ARTS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: EA