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EA reported Q4 adjusted revenue of $1.75 billion, just below the consensus estimates of $1.77 billion. Adjusted EPS stood at $1.32 in the period, while analysts were looking for $1.42 per share.
Live Services & Other revenue stood at $1.39 billion, up 27% YOY and below the analyst expectations of $1.49 billion. EA generated $438 billion in full game revenue, up 75% YoY and beating the consensus projection of $285.1 million.
For Q1, EA expects adjusted revenue in the range of $1.2 billion to $1.25 billion, missing the consensus of $1.45 billion. FY 2023 adjusted revenue is expected to be between $7.9 billion and $8.1 billion, while analysts were expecting $8 billion. The company expects FY 2023 operating cash flow in the range of $1.6 billion to $1.65 billion, compared to the consensus estimates of $2.33 billion.
EA announced a quarterly dividend of 19c per share, up 12% from the previous quarter.
MoffettNathanson analyst Clay Griffin upgraded shares to Buy with a $141.00 per share price target.
“With a clean balance sheet, consistent and strong free cash flow generation, and a stable of other healthy franchises already in hand, EA is set up pretty well to weather continued market volatility. Rising rates are a drag on every financial asset, but with a significantly cheaper stock and relative advantages, we think EA is worthy of an upgrade to Buy,” Griffin said in a client note.
Raymond James analyst Andrew Marok cut the price target to $150.00 per share, down from $158.00, but remains Outperform-rated.
“EA’s pipeline for FY23 looks robust (concentrated in 2H), with 4Q bringing a major IP (potentially Jedi FallenOrder 2), a high profile remake (we believe Dead Space), an unannounced Partner IP, and a new sports title (Super Mega Baseball) in addition to a strong mobile lineup featuring a revamped FIFA, Apex Legends Mobile, and a new Lord of the Rings title. While industry metrics remain hit-and-miss, EA’s F4Q results demonstrate stability driven by top-class IP and content resonating with players,” Marok told clients.
By Senad Karaahmetovic
