Boston, MA 05/07/2014 (wallstreetpr) – Electronic Arts Inc. (NASDAQ:EA) is surging in Wednesday trading session by a high of 16.61% after posting higher than expected revenue for the quarter and announcing plans to repurchase shares worth $750 million. Fourth quarter profit beat analysts’ estimates driven by improved sales for the new generation consoles. Profit for the quarter came in at 48 cents a share easily beating 11 cents a share on average for 23 analysts’ estimates.
Focus Shifting to Digital Integration
The solid results for the quarter caped a year that the company under the leadership of CEO Andre Wilson has been making progress in becoming a top provider for games sold online rather than, the conventional retail stores. Digital revenue consequently accounted for 45% of total sales. The company is now shifting its focus into digital integration by essentially building more and more live services mostly associated with games.
Introduction of two new consoles in the quarter further accelerated growth, in the mobile gaming audience compared to last year. Mobile revenues consequently set a new record coming in at $460 million. EA’s mobile business also reached a landmark in terms of active monthly users who clocked in at a high of 130 million. Gross margin, on the other hand, expanded by 150 basis points to 61.6% driven by growth in digital revenues.
Upgraded Consoles
Electronic Arts Inc. (NASDAQ:EA) made a huge leap in terms of earnings due to the sale of consoles from Microsoft’s Xbox One, Sony’s PlayStation 4 and FIFA 14. Improved sales in this case were slightly overshadowed by the fact that the company issued a muted forecast for the coming quarter citing uncertainty in sales. Consumers are now expected to upgrade to Microsoft and Sony’s upgraded versions of their current consoles as of November.
Net income for the quarter as a result of improved sales was up by 14% to $367 million, this was, on the other hand, overshadowed by the fact that net income slipped by 92% to $8 million on a full year basis. This comes as Electronic Arts Inc. (NASDAQ:EA) plans to repurchase shares worth $750 million as of May 2016. Current quarter earnings are expected to be highly impacted by the forthcoming World cup Football Title that is set to start in June, in Brazil.
