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EA posts a loss on better-than-expected revenues for the holiday season

EA posts a loss on better-than-expected revenues for the holiday season

January 30, 2018 | By Alex Wawro

The folks at Electronic Arts today reported a loss for the company's most recent quarter, the three-month period ended December 31, 2017, but reportedly saw a bit of a stock price increase thanks to posting better-than-expected revenues.

EA posted a $186 million loss on $1.16 billion in revenue (GAAP) generated during the holiday quarter. That's a bit better than $1.15 billion in revenues it generated during the same period a year ago (on which it reported a loss of only $1 million) and a significant improvement over the roughly ~$1.14 billion some analysts predicted.

Intriguingly, the company also chalks up roughly $176 million of its losses during the quarter to "incremental income tax expense...due to the application of the Tax Cuts and Jobs Act," which was enacted last month in the United States.

Most of EA's revenue for the quarter (~$810 million) was generated from console software sales, while $181 million was generated from sales on PC/browser and $161 million came from sales on mobile devices.

In terms of whether EA is making more from sales of digital goods or packaged products, this quarter's revenue split was roughly 67 percent digital, 33 percent physical; that's well in line with prior quarters, and actually a bit more heavy on retail sales than the prior quarter (which was 72/28 digital/physical), likely due to an increased interest in physical products during the holiday shopping season.

No games were specifically called out as big sales generators, though EA's press release did note that "nearly 70 percent of players engaged in the single-player campaign" for Star Wars Battlefront II, and The Sims 4 had its "highest-performing expansion pack to date" (The Sims 4: Cats & Dogs) during the quarter.

Looking ahead, the company says it expects to generate roughly $1.53 billion during its fourth quarter (which we're immersed in right now), resulting in an estimated $5.1 billion revenue target for its 2018 fiscal year.

"Through the fourth quarter and fiscal 2019, we’ll be launching games across five different genres, on three different platforms, and to players around the world. We expect growth in full-game downloads, subscriptions, extra content, and in our mobile business."

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