Upcoming AWS Coverage on Zynga Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 25, 2017 / Active Wall St. announces its post-earnings coverage on Electronic Arts Inc. (NASDAQ: EA). The Company posted its financial results for the fourth quarter fiscal 2017 (Q4 FY17) and full year fiscal 2017 (FY17) on May 09, 2017. The Redwood City, California-based Company's total net revenues grew 17% y-o-y; while its diluted net income beat market consensus estimates. Register with us now for your free membership at:

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One of Electronic Arts' competitors within the Multimedia & Graphics Software space, Zynga Inc. (NASDAQ: ZNGA), released on May 04, 2017, its Q1 2017 financial results. AWS will be initiating a research report on Zynga in the coming days.

Today, AWS is promoting its earnings coverage on EA; touching on ZNGA. Get our free coverage by signing up to:

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Earnings Reviewed

Electronic Arts reported total net revenues of $1.53 billion in Q4 FY17, rising from the $1.31 billion recorded in Q4 FY16. The Company's quarterly revenues (including deferred revenues of $384 million) stood at $1.09 billion, which came in-line with market consensus estimates.

The video game maker's net income fell to $566 million, or $1.81 per diluted share, in Q4 FY17 from $899 million, or $2.79 per diluted share, in Q4 FY16. Meanwhile, Wall Street had expected the Company to report net earnings of $1.63 per diluted share.

In FY17, Electronic Arts reported record net revenues of $4.85 billion compared to $4.40 billion in the previous year's same period. The Company reported net income of $967 million, or $3.08 per diluted share in FY17, versus $1.16 billion, or $3.50 per diluted share, in FY16.

Operating Metrics

In Q4 FY17, the Company's gross profit improved to $1.33 billion, or 86.8% of total net revenues, from $1.08 billion, or 82.7% of total net revenues, in the year ago same period. Furthermore, the Company's operating income increased to $717 million, or 47.0% of total net revenues, in Q4 FY17 from $536 million, or 41.0% of total net revenues, in the prior year's corresponding period.

Net Revenue by Geography

During Q4 FY17, revenues from North America accounted for 42% of total net revenues, which amounted to $644 million, compared to 44% of total net revenues, aggregating $572 million in the previous year's comparable period. International sales made up for 58% of the Company's total net revenues in Q4 FY17, amounting to $883 million, up from 56% of total net revenues and $736 million of revenues in Q4 FY16.

Net Revenue by Composition

Total digital contributed $934 million, or 61% of total net revenues, in the reported quarter, up from $715 million, or 55% of total net revenues, in Q4 FY16. Furthermore, revenues from packaged goods and others came in flat at $593 million during Q4 FY17.

Net Revenue by Platform

In Q4 FY17, total consoles' net revenues were $1.11 billion, or 73% of the Company's total net revenues, rising from $941 million, or 72% of total net revenues, in the prior year's same quarter. Revenues from PC/Browser platform also increased to $246 million, or 16% of total net revenues in Q4 FY17 from $195 million, or 15% of total revenues, in Q4 FY16. Meanwhile, revenues from Mobile platform came in at $165 million, or 11% of total net revenues, in Q4 FY17 compared to $151 million, or 11% of total net revenues, in Q4 FY16.

Cash Flow and Balance Sheet

In the year ended March 31 2017, the Company reported record net cash provided by operating activities of $1.38 billion versus $1.22 billion in FY16. As on March 31 2017, the Company had cash and cash equivalents balance of $2.57 billion compared to a balance of $2.49 billion as on March 31, 2016.

Share Repurchases

Electronic Arts repurchased 1.5 million shares for $125 million in Q4 FY17 and a total of 6.5 million shares for $508 million in full year FY17. The Company has also announced a new share repurchase program of up to $1.2 billion. This new stock repurchase program will expire on May 31, 2019.

Outlook

In its guidance for full year FY18, Electronic Arts' management expects net revenue to be approximately $5.08 billion. Net income for FY18 is forecasted to be approximately $1.13 billion, while diluted earnings per share are anticipated to be approximately $3.57. Furthermore, operating cash flow for the full-year FY18 is projected to be approximately $1.58 billion.

For the quarter ending June 30, 2017, the Company is expecting net revenues to be approximately $1.43 billion. Net income for the upcoming quarter is predicted to be approximately $605 million, whereas diluted earnings per share during Q1 FY18 are forecasted to be approximately $1.93.

Stock Performance

On Wednesday, May 24, 2017, Electronic Arts' share price finished the trading session at $112.31, climbing 3.03%. A total volume of 4.49 million shares exchanged hands, which was higher than the 3 months average volume of 2.83 million shares. The stock has soared 29.61% and 43.51% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the Company have skyrocketed 42.60%. The stock is trading at a PE ratio of 36.45 and has a market cap of $34.59 billion.

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