Company Performance - Moderna (MRNA) shares increased by 10.1%, driven by discussions on AI's potential in cancer vaccine development and additional government funding for avian influenza vaccine development [4] - GE Aerospace (GE) reported better-than-expected sales and profits for Q4, with shares rising 6.6% due to strong profit guidance for 2025 and progress in resolving supply chain issues [5] - Union Pacific (UNP) shares rose 5.2% after exceeding analysts' expectations with a year-over-year increase in quarterly EPS, aided by lower fuel costs and improved freight car velocity [6] - Electronic Arts (EA) shares fell 16.7% after the company lowered its net bookings guidance, attributing the decline to underperformance in several games, particularly its soccer franchise [7] - Leidos Holdings (LDOS) secured a TSA contract for airport security equipment maintenance, but shares dropped 7.6% following concerns about potential government spending cuts discussed by CACI International [8] - Micron Technology (MU) shares decreased by 4.0% after competitor SK Hynix indicated a mixed demand outlook for 2025, although Micron may benefit from favorable Trump administration policies [9] Market Overview - Major U.S. equities indexes, including the S&P 500, Dow, and Nasdaq, moved higher, with the S&P 500 gaining 0.5% to reach an all-time closing high [2][3]

Earnings Performance - EA preannounced fiscal Q3 2025 earnings, with shares dropping 17.5% to $117.50 per share [1] - Expected earnings per share were $1.15, but the actual figure is $1.11, missing Wall Street estimates [1] - Q3 net revenue is projected to be $1.88 billion, below the Wall Street estimate of $2.33 billion [3][4] Revenue Guidance - EA initially guided for mid-single-digit growth in live services net bookings for fiscal 2025 [2] - The guidance has been revised to a mid-single-digit decline, reflecting weaker performance [2] Factors Impacting Performance - A slowdown in bookings for the Global Football franchise contributed to the revenue decline [3] - The number of players for Dragon Age games fell short by nearly 50% in Q3 [3] Valuation and Market Reaction - EA stock is trading at 30 times trailing earnings, which may be too expensive given the slumping sales [5] - Despite missing revenue estimates, EA's earnings of $1.11 per share slightly beat Yahoo! Finance's prediction of $1.06 [4]

Core Viewpoint - Electronic Arts (EA) announced a workforce reduction of 6% and lowered its full-year bookings guidance, primarily due to challenges with its soccer franchise, leading to a significant drop in its stock price [1][2]. Financial Performance - For the fiscal third quarter ending December 31, EA expects net bookings of approximately $2.215 billion, down from previous guidance of $2.4 billion to $2.55 billion [3]. - Revenue for the December quarter was reported at about $1.88 billion, with diluted earnings per share of $1.11 [3]. - EA anticipates full fiscal year net bookings between $7 billion and $7.15 billion, a decrease from prior guidance of $7.5 billion to $7.8 billion [4]. Product Performance - The company's soccer franchise, which transitioned from FIFA branding to EA Sports FC, has shown significant weakness, impacting overall performance [4]. - The role-playing game "Dragon Age" had 1.5 million players during the quarter, approximately 50% below expectations [5]. - EA expects Global Football sales to decline year-over-year and anticipates a decrease in bookings from online sales in fiscal 2025, with the soccer franchise being a major contributor to the shortfall [5].

Core Viewpoint - Electronic Arts (EA) has reported disappointing preliminary results for its fiscal 2025 third quarter, leading to a significant downward revision of its full-year bookings forecast, resulting in an over 18% drop in stock price [1][2]. Financial Performance - For the fiscal third quarter, EA expects revenue of approximately $1.883 billion and earnings of roughly $1.11 per share, down from previous guidance of $1.875 billion to $2.025 billion in revenue and earnings between $0.85 and $1.02 per share [2]. - For the full fiscal year, EA anticipates a mid-single-digit decline in net bookings, a shift from its earlier guidance of mid-single-digit growth, primarily due to underperformance in its Global Football unit [3][4]. Market Reaction - EA's stock was the worst performer in the S&P 500 on the day of the announcement, reflecting investor concerns over the company's financial outlook [1]. - Despite recent struggles, Wall Street analysts remain generally bullish, with an average target price of $153.18, indicating an implied upside of over 30% from current levels [6][7]. Analyst Opinions - Financial services firm Wedbush has maintained an Outperform rating and a price target of $173, suggesting confidence in a rebound despite the current challenges [8]. - Analysts express that EA may face a period of stagnation, referred to as "dead money," until the company provides clearer visibility into its future release schedule for fiscal years 2026 and 2027 [9].

Electronic Arts Inc. (NASDAQ:EA) stock is near the bottom of the Nasdaq today, last seen down 17.3% to trade at $117.62. The video game company cut its third-quarter and 2025 bookings forecast, citing a slowdown in the popular FIFA franchise. In response, three brokerages issued downgrades, while four more brokerages issued price-target cuts, the worst coming from Stifel to $133 from $159. There could be more adjustments on the way, considering EA's 12-month consensus price target of $154.01 is a 31.4% prem ...

About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Key TakeawaysElectronic Arts shares are tumbling 15% in premarket trading Thursday, a day after slumping demand for its EA SPORTS FC 25 video game prompted the company to cut its outlook.The company projected net bookings to be $2.22 billion for the fiscal third quarter, down from $2.4 billion to $2.55 billion previously.EA also cut its fiscal 2025 net bookings forecast to a range of $7 billion to $7.15 billion, down from $7.5 billion to $7.8 billion. Electronic Arts (EA) shares are tumbling in premarket tr ...

Core Viewpoint - Electronic Arts (EA) has reduced its full-year bookings guidance due to underperformance in its soccer franchise, EA Sports FC, leading to a 7% drop in shares during extended trading [1][3]. Financial Performance - For the fiscal third quarter ending December 31, EA expects net bookings of approximately $2.215 billion, down from previous guidance of $2.4 billion to $2.55 billion [2]. - Revenue for the December quarter is projected to be around $1.88 billion, with diluted earnings per share of $1.11 [2]. - EA anticipates full fiscal year net bookings between $7 billion and $7.15 billion, a decrease from earlier guidance of $7.5 billion to $7.8 billion [3]. Game Performance - The soccer franchise, previously branded under FIFA, has shown weakness, with a noted slowdown in growth after two years of double-digit increases in net bookings [4]. - EA's role-playing game "Dragon Age" had 1.5 million players during the quarter, falling short of expectations by nearly 50% [4]. - The company expects Global Football sales to decline year-over-year and anticipates a decrease in bookings from online sales in fiscal 2025, primarily due to the soccer franchise's underperformance [4]. Recent Developments - EA recently updated FC 25 with new content and gameplay improvements, which received positive feedback from players [5].

Company Performance and Challenges - EA's subpar performance is attributed to fierce competition in the gaming industry, challenges in player engagement and retention, and weak monetization in freemium models [1][2] - EA faces lower-than-expected monetization in freemium models, particularly in Apex Legends Season 22 [2] - EA's shares have lost 8.5% in the past month, underperforming the Zacks Consumer Discretionary sector's decline of 0.4% and the Zacks Gaming industry's loss of 3.1% [8] - EA's stock has underperformed peers like Roblox (RBLX), Nintendo (NTDOY), and TakeTwo Interactive Software (TTWO) in the same time frame [8] Financial Estimates and Trends - For Q3 fiscal 2025, EA expects net revenues of $1.875-$2.025 billion and diluted earnings of 85 cents to $1.02 per share [3] - For full-year fiscal 2025, EA expects net revenues of $7.4-$7.7 billion and diluted earnings of $3.82-$4.33 per share [3] - The Zacks Consensus Estimate for Q3 fiscal 2025 revenues is $2.51 billion, indicating year-over-year growth of 6.02% [10] - The Zacks Consensus Estimate for Q3 fiscal 2025 earnings is $3.41 per share, indicating year-over-year growth of 15.2% [10] - The Zacks Consensus Estimate for full-year fiscal 2025 revenues is $7.69 billion, indicating year-over-year growth of 3.51% [11] - The Zacks Consensus Estimate for full-year fiscal 2025 earnings is $7.82 per share, indicating year-over-year growth of 12.52% [11] - EA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 4.29% [11] Gaming Portfolio and Innovations - EA benefits from an expanding portfolio with immersive offerings in sports, adventure, and life simulation games [6] - EA leverages GenAI and advanced technologies like ICE Q for enhanced gameplay and creative experiences [6] - In Q2 fiscal 2025, total hours played increased by 140% year over year [6] - EA's latest releases include Dragon Age: The Veil Guard, The Sims 4 Creator Kit, and My Sims Cozy bundle [9] - EA and Hazelight Studios announced Split Fiction, a co-op action-adventure game blending sci-fi and fantasy, set to release on March 6 [9] Industry and Competitive Landscape - EA faces fierce competition in the gaming industry, especially in the free-to-play (FPS) segment [2] - Challenges persist in maintaining consistent player engagement and retention across some franchises [2]

Core Viewpoint - Electronic Arts (EA) has shown strong performance in its recent earnings report, with significant year-over-year growth in earnings and revenues, driven by recovery in live services and full game revenues [2][3]. Financial Performance - EA reported Q2 fiscal 2025 earnings of $2.15 per share, a 47.3% increase year over year, with revenues rising 5.8% to $2.02 billion [2]. - Net bookings for the fiscal second quarter reached $2.07 billion, up 14.2% year over year, largely due to the positive reception of EA SPORTS College Football 25 [3]. - Full-game net bookings were $832 million, reflecting a 20% increase year over year, while live services net bookings rose 10% to $1.25 billion [4]. Revenue Breakdown - Full-game revenues accounted for 35.4% of total revenues, increasing 15.3% year over year to $716 million, with full-game download revenues up 37% to $475 million [5]. - Live services and other revenues, making up 64.6% of total revenues, increased 1.2% year over year to $1.3 billion [6]. - Console revenues grew 16% year over year to $1.37 billion, while revenues from PC & Other and mobile platforms declined by 14% and 5%, respectively [6]. Operating Metrics - GAAP gross profit increased 7.6% year over year to $156 billion, with a gross margin of 77.5% [7]. - Operating income on a GAAP basis rose 1.9% year over year to $384 million, with an operating margin of 19% [8]. Balance Sheet and Cash Flow - As of October 30, 2024, EA had $2.5 billion in cash and short-term investments, down from $2.76 billion as of June 30, 2024 [9]. - The company repurchased 2.6 million shares for $375 million during the quarter, totaling 10.2 million shares for $1.4 billion over the trailing 12 months [9]. Dividend and Guidance - EA declared a quarterly cash dividend of 19 cents per share, payable on December 18, 2024 [10]. - For Q3 fiscal 2025, EA expects revenues between $1.875 billion and $2.025 billion and earnings per share in the range of 85 cents to $1.02 [11]. - For fiscal 2025, EA anticipates revenues of $7.4 billion to $7.7 billion and net bookings between $7.5 billion and $7.8 billion [12]. Market Sentiment - Estimates for EA have trended downward over the past month, with a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [14][16].