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What Does A Strong Electronic Arts Quarter Mean For Peers?

Electronic Arts' Strong Quarter Bodes Well For Peers|NASDAQ: EA NYSE: GME NASDAQ: ATVI NASDAQ: TTWO

Video game producer Electronic Arts Inc. EA reported second-quarter earnings after the bell Tuesday. In the company’s previous quarter, EA crushed earnings estimates, which gave it an initial bump. However, the stock has since come back down to similar levels prior to the release.

EA Print

  • GAAP EPS $0.70.
  • Revenue: $1.1 billion.
  • On GAAP basis, net quarterly revenue: $898 million.
  • Diluted loss per share (GAAP-based): $0.13.
  • Analysts' expectations: non-GAAP EPS at $0.43.
  • Analysts' expectations: Revenue of $1.09 billion.
  • Analysts' expectations: GAAP-based diluted loss per share at $0.17.

There is a correlation between a strong quarter from EA and its counterparts within the space.

Take-Two Interactive

After the strong Q1 from EA, rival Take-Two Interactive Software, Inc. TTWO has had a very strong past three months, up nearly 10 percent. Take-Two will follow up EA's earnings release with its own on Wednesday.

Activision Blizzard

Activision Blizzard, Inc. ATVI investors have had plenty to celebrate recently with its strong product lineup and impressive performance. Since EA’s first quarter, Activision’s stock has moved up almost 7 percent.

GameStop

While GameStop Corp. GME initially received a bump from EA’s strong first quarter, missing earnings on its own second-quarter release later in the month sent the stock plummeting. It has still yet to recover. However, analysts are still bullish on the stock, with four analysts rating the stock a Buy.

With EA's positive second-quarter earnings, analysts await the impact it will have on the rest of the video game industry.

Wednesday's Pre-Market

  • Activision was up 1.53 percent at $43.25.
  • Electronic Arts was up 5.34 percent at $77.84.
  • GameStop showed no after-hours/pre-market trades, having closed Tuesday down 2.04 percent at $23.56.
  • Take-Two showed no trades after the regular session Tuesday, having closed down 1.04 percent at $43.93.

Image Credit: By Eliot Lash (Own work) [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

DateFirmActionFromTo
Oct 2016Cowen & Co.DowngradesOutperformMarket Perform
Oct 2016Bank of AmericaDowngradesBuyNeutral
Sep 2016Morgan StanleyInitiates Coverage onOverweight

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