EA shares slump 12% on reaction to results, 'Star Wars' game delay
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Electronic Arts (NASDAQ:EA) shares remained down by more than 12% Wednesday as the videogame publisher showed no signs of recovering from what was largely seen as a disappointing quarterly report and outlook.
EA (EA) on Tuesday reported fiscal third-quarter bookings of $2.34B, down from $2.58B in the same period in 2021, and also below analysts' expectations for billings of $2.5B. EA (EA) also gave investors little to get enthusiastic about as it said it was pushing out the release of Star Wars Jedi: Survivor by six weeks, until April 28.
With pushing out Star Wars until the end of April, EA (EA) said it now expects its fiscal fourth-quarter bookings to be in a range of $1.675B to $1.775B--far below analysts' estimates for $2.24B in bookings.
The fact that EA's (EA) performance came during the crucial end-of-the-year Christmas and holiday shopping season, and it was delaying the release of one of its most-anticipated titles left a cloud of gloom hanging over the videogame giant.
"Pushouts, cancellation, [and] softness give little to grasp on to," said Bank of America Securities analyst Omar Dessouky, who cut his rating on EA's (EA) stock to neutral from buy, with a price target of $130 a share.
At Jefferies, analyst Andrew Uerkwitz left his buy rating on EA's (EA) stock unchanged, and said the company had suffered "a rare miss" with its fiscal third-quarter results as it "finally succumbed to the [industry] headwinds."
"Game delays, increasing game complexity, uncertain consumer behavior, and general macro [economic issues] have been wrecking havoc on the video game industry," Uerkwitz said in a research note.
Wall Street analysts and Seeking Alpha authors both have consensus buy ratings on EA's (EA) shares. Seeking Alpha's Quant System, which historically outperforms the stock market, gives EA (EA) a rating of hold.