Why Is Electronic Arts (EA) Up 0.9% Since Last Earnings Report?

Core Viewpoint - Electronic Arts (EA) reported disappointing Q2 fiscal 2026 earnings, missing estimates and showing a significant year-over-year decline in both earnings and revenues, raising concerns about future performance leading up to the next earnings release [2][10]. Financial Performance - EA's Q2 fiscal 2026 earnings were 54 cents per share, missing the Zacks Consensus Estimate of $1.27, and representing a 51.4% decline year-over-year [2]. - Revenues for the quarter were $1.84 billion, down 9.2% year-over-year, and below the consensus mark of $1.86 billion [2]. - Net bookings totaled $1.82 billion, a decrease of 12.6% year-over-year, with full-game net bookings at $700 million, down 15.9% [3]. Revenue Breakdown - Full-game revenues, accounting for 33.6% of total revenues, decreased 13.7% year-over-year to $618 million [4]. - Live services and other revenues, making up 66.4% of total revenues, fell 6.7% year-over-year to $1.221 billion [5]. - Revenues from consoles declined 11.8% year-over-year to $1.212 billion, while revenues from PC & Other and mobile platforms decreased by 3.3% and 4.2%, respectively [5]. Operating Metrics - GAAP gross profit decreased 11% year-over-year to $1.4 billion, with gross margin contracting by 200 basis points to 75.9% [6]. - Operating income on a GAAP basis fell 47.9% year-over-year to $200 million, with the operating margin dropping from 19% to 10.9% [7]. Balance Sheet and Cash Flow - As of September 30, 2025, EA had $1.26 billion in cash and short-term investments, down from $1.63 billion as of June 30, 2025 [8]. - The company generated $130 million in net cash from operating activities for the quarter and $1.87 billion for the trailing twelve months [8]. - EA repurchased 2.3 million shares for $375 million during the quarter, totaling 17.5 million shares for $2.5 billion over the trailing twelve months [8]. Dividend and Acquisition - EA declared a quarterly cash dividend of 19 cents per share, payable on December 23, 2025 [9]. - The company announced a definitive agreement for acquisition by an investor consortium at an enterprise value of approximately $55 billion, pending regulatory approvals and stockholder approval [10]. Market Outlook - Recent estimates for EA have shown an upward trend, with a consensus estimate shift of 5.63% [11]. - EA currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [13]. Industry Comparison - EA is part of the Zacks Gaming industry, where Las Vegas Sands (LVS) has outperformed with a 16.1% gain over the past month, reporting revenues of $3.33 billion, a year-over-year increase of 24.2% [14].