What to Expect When Electronic Arts (EA) Reports Earnings Results

NEW YORK (TheStreet) -- Electronic Arts (EA) is scheduled to release its fourth quarter 2015 earnings results after the market close this afternoon, and analysts are expecting the gaming software content and services provider to post a year-over-year decline in earnings per share and revenue for the most recent quarter.

EA has been forecast to report earnings of 25 cents per share on revenue of $850.23 million.

Last year the company said its non-GAAP adjusted earnings were 48 cents per share on revenue of $914 million for the 2014 fourth quarter.

Based in Redwood City, CA. Electronic Arts develops, markets, and publishes video games. Some of the company's games include "The Sims," "Titan Fall", and "SSX." The company's EA sports category is also widely popular.

Shares of Electronic Arts are down by 0.56% to $58.97 in mid-morning trading on Tuesday.

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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 39.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EA's debt-to-equity ratio is very low at 0.24 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 1.12, 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.
  • Powered by its strong earnings growth of 144.00% and other important driving factors, this stock has surged by 105.26% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 146.1% when compared to the same quarter one year prior, rising from -$308.00 million to $142.00 million.
  • You can view the full analysis from the report here: EA Ratings Report
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