EA stock surges on earnings

Publisher's share price spikes nearly 15% following better-than-expected holiday-quarter report.

Yesterday, Electronic Arts reported its earnings for the quarter ending December 31, 2010. Using generally accepted accounting principles, it was a rough quarter for the company, with $322 million in losses on $1.05 billion of revenue. However, excluding one-time charges such as restructuring expenses, the company had a solid quarter, with profits of $196 million on $1.4 billion of revenue.

EA's stock shot skyward this morning.

This morning, the markets reacted to the latter number--strongly. As of press time, EA stock was up nearly 15 percent, or $2.33, to $17.95. Trading volume was heavy, with 31.82 million shares in play, with the stock reaching a high of $18.20 earlier in the day.

EA's stock surge was also fueled by the company's announcement of a $600 million buyback of its stock over the next 18 months. The company also announced that during calendar 2010, five of its games, including Need for Speed: Hot Pursuit and Medal of Honor, had shipped over 5 million units each. One of those, FIFA 11, shipped over 11 million units worldwide. Digital revenue was also up 39 percent year-over-year.

Following EA's report, Wedbush analyst Michael Pachter sent out a note to investors in which he pegged the company's 12-month share price at $21.50. He maintained his "outperform" rating of the stock and narrowed his full-year guidance to $3.682-$3.782 billion from $3.65-$3.90 billion.

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Discussion

49 comments
monson21502
monson21502

hope they put some of the money to make bbc3 less boring and not look like a xbox 1 game

NDegree
NDegree

[This message was deleted at the request of a moderator or administrator]

monson21502
monson21502

after having to start a new account on my ps3 for all ea games to play online... EA is on my crap list

andrew_ribbons
andrew_ribbons

I love how fickle the community is. Everyone hated EA 3 years ago. Now in light of Activision and EA's mellowing-out & branching-out ideas, they're the superstars again. No doubt, i used to pretty much loathe EA for their pratices back 3 years ago. Now they produce quality titles quite regularly.

grasshopper6
grasshopper6

hmmm interesting .... gotta get me need for speed

adidas32x
adidas32x

then they have ME3, DA:O 2, and SWTOR coming out this year, good for them, and us :)

wexorian
wexorian

2010 year was good, for Ea they have launched good games, Now we got also dead space 2 and Whole year in front with cool games, keep going like this, don't became greedy, Don't kick famous game developers from company (like Kotickvision :D ) and everything will be fine.

Reilly86
Reilly86

Ive been telling customers for weeks to buy EA shares and did anybody listen to me...no. Ive had EA shares since November and have been waiting for this announcement for weeks. Time to cash in me thinks.

ecto69
ecto69

They saved a bundle on ME2 for PS3...

shakensparco
shakensparco

Whenever I see the EA logo, I always think of EA as a sports game company before anything else, even if that isn't true anymore.

Bardock47
Bardock47

Finally some good news thats not "This company lost tons of money!"

tizmond
tizmond

@Shardz7 So you've denied yourself the pleasure of playing the likes of Dead Space 1 & 2, Mass Effect 2, Dragon Age: Origins & Crysis, simply, because they have the EA logo on the front ??? Don't get me wrong, I'm disgusted by some of EA's practices: Online Pass-keys, rip-off DLC, "Encouraging" developers to include multiplayer in all games, bringing out unfinished games to make release dates, the yearly sports games that are pretty much the same every year. However, I'll still buy their games if I like the look of them. @tachsniper Are you serious ? EA are our only "hope" against greedy Activision. Because EA aren't greedy at all, right ???? Fool.

fLaMbOaStiN
fLaMbOaStiN

I actually like EA.. I know it's sad what they did with sports game (preferably Madden) but i don't see them as some evil giant corporation as i do, say, Activision.

LycanBane
LycanBane

Battlefield Bad Company Vietnam was awesome not surprised ;) lol

Shardz7
Shardz7

Well, it certainly wasn't me mass purchasing their crap. I haven't bought an E.A. game since 1998 and I think I'll keep it that way for a while.

MrHatnClogs
MrHatnClogs

I bet EA is thankful for Bobby Kotick for taking all the hate off of EA! Oh man remember that, when we were all complaining and hating on EA? Good times!

Sagacious_Tien
Sagacious_Tien

EA certainly have a lot to be happy about. They are making good games and making good profits.

muzza93
muzza93

Its because of NFS Hot Pursuit, EVERYONE bought it, sold out everywhere for a couple weeks

benboz
benboz

Well Done EA. I love your games.

gamekingsz
gamekingsz

FIFA IS EA's 1st class motor engine :P

MrHatnClogs
MrHatnClogs

[This message was deleted at the request of the original poster]

inline243
inline243

The Masters will be awesome this year!

Jd1680a
Jd1680a

EA have a big line of games this year. Dead Space 2 is just one game that did very well, next it will be Dragon Age 2 and Mass Effect 3, all comes out in the same year.

kennythomas26
kennythomas26

hey this is great news and I for one have enjoyed a handful of game's that have come out this past year and I'm looking forward to another great year from them.

TWO1FIVE
TWO1FIVE

Mass Effect 2 Dead Space Series Bad Company 2 Medal of Honor NFS HP I bought all these games and have throughly enjoyed them. Way to go EA!

Colin1192
Colin1192

maybe they have turned the corner and will string together a bunch of quality quarters

OJ_the_LION
OJ_the_LION

Well, as it stands now I like EA better than Activision. I'm not fond of their DRM, but I really enjoyed Mass Effect 2 and Hot Pursuit (which, by the way, sold much better than I thought apparently). If they keep putting out quality games like those, there may be hope for them yet.

DarthVeng_basic
DarthVeng_basic

Pity, I was hoping them and Activision would go belly up so the market isn't saturated with their vile corporate greed.

DLobotomist
DLobotomist

if this is good news wait til they get their numbers on Dead Space 2..... the thing is selling like hot cakes right now.... and it should.... its a good game....

DPumbliQ
DPumbliQ

I personally think it's great to see EA is doing so good. They've published a lot of good games recently and I think they really deserve this. They're not nearly as bad as they once were and even back then, they were angels compared to Activision.

gypsygib
gypsygib

I have more EA published games than anything. Their devs do make some of the best games out there in almost all genres so good for them.

calvinsora
calvinsora

Pretty good news all things considered. EA often acts like a money-hungry corporation (as per many of the big publishers), but there are a lot of games they help make happen that I love, for instance BioWare's games and Dead Space.

Neo_Sarevok
Neo_Sarevok

Bad news. I hope EA goes bankrupt for monopolizing the NFL franchise. Thanks a lot EA for restricting 2k.

santinegrete
santinegrete

@The_Capitalist: And I thought Dead Space 2 did that good to stock prices (no sarcasm).

spector000
spector000

$3.6 billion.... how much is that in candy bars? :)

Novemberfreeze
Novemberfreeze

good to hear. hope they dont let this go to their head.

Novemberfreeze
Novemberfreeze

good to hear. hope they dont let this go to their head.

sulaymanqazi
sulaymanqazi

i love games from EA. most of their games are awesome.

Threesixtyci
Threesixtyci

I wonder if the Holiday Steam sales had anything to do with that?

Cantido
Cantido

Yay. Wonderful. Now patch Tim Schafer's game. He already said he made a patch and you refuse to make it available.

The_Capitalist
The_Capitalist

You guys know that the share price only increased because of the stock buyback announcement, right?\ Still, it's good to see EA returning money to investors... unlike some companies like Apple...

advanracer
advanracer

finally something positive to report. We're tired of hearing krActivision's financial burdens and scams.

tachsniper
tachsniper

Go EA! You're our only hope against Greed Inc, that is Activision.