EA Q4 2019 Revenue Expectations: Low Earnings and Poor Performance in Asia

The EA Q4 2019 Earnings Conference Call is scheduled to be held on May 7. EA is expected to post revenues of $1.19 billion for the fourth quarter, a drop of 5.3% over the past year’s $1.25 billion. Activision Blizzard’s revenues are expected to fall by 9.9% while Take-Two Interactive’s is expected to rise by 23.5%, as per analysts.

While EA Q4 2019 sales figures might not look as bad, it’s non-GAAP earnings per share(EPS) is expected to fall significantly by 26.7% in the fourth quarter. EA has an EPS of $1.93 in Q3, which was 0.5% lower than analysts’ estimates of $1.93 and an EPS of $0.88, which was 51.7% higher than estimates of $0.58 in the Q2. EA also exceeded expectations in Q1 when they posted EPS of $0.15 which was 150% higher than the expected EPS of $0.06.

EA Earnings Per Share Summary
Source: NASDAQ

In 2018, EA delayed Battlefield V, one of its most popular franchises to work on bug fixes and pushed the release date back to November to mediocre reviews and terrible sales, leading to the game being discounted 50% during the holidays. Even though EA management claims that the loss in sales was due to expectations of discounted products during the holidays, it can be quite easily attributed to its monumental fail of a marketing campaign. Moreover, the game released with half of its content scheduled to launch at a later date, including FireStorm, BFV’s battle-royale mode, which was released last month.

In the mobile gaming segment, EA’s top 20 titles are all over 3 years old, proving that recent titles haven’t found much success. Command & Conquer: Rivals released in Q3 to a fairly positive response but still haven’t gained enough traction. Moreover, EA’s performance in Asia, particularly China has also been quite lackluster. FIFA Online 4 has had slow growth and FIFA Mobile hasn’t been in the market long to reap benefits from.

As a whole, EA’s failure in both the conventional and mobile gaming industry will more than likely result in a fall in sales in fiscal 2019. With the short-lived success of Apex Legends and the failure of Anthem, things aren’t looking much brighter for EA’s future.

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