Electronic Arts sales forecast disappoints as gaming craze cools
2022.08.03 00:53
FILE PHOTO: An Electronic Arts office is shown in Los Angeles, California, U.S., July 27, 2020. REUTERS/Mike Blake
(Reuters) -Electronic Arts Inc on Tuesday forecast quarterly adjusted sales below estimates as easing COVID-19 curbs cool the pandemic-era gaming rage by unlocking other avenues for entertainment.
The video game publisher behind “Apex Legends” expects second-quarter adjusted sales between $1.73 billion and $1.78 billion, compared with analysts’ estimate of $1.87 billion, according to Refinitiv IBES data.
“FX has become a little bit more of a headwind,” said Chief Financial Officer Chris Suh, adding that the strengthening of the U.S. dollar would impact the third and fourth quarter.
Rival Activision Blizzard (NASDAQ:ATVI) had also delivered a disappointing second quarter, while Sony (NYSE:SONY) Group Corp trimmed its annual profit forecast after its PlayStation business faltered.
U.S. consumer spending on video games fell 11% in June and is expected to decline 8.7% in 2022 on growing recession concerns, supply snags and a lighter slate of releases, according to analytics firm NPD. https://
EA’s first-quarter adjusted sales of $1.3 billion was lower than last year’s, but still beat Wall Street targets thanks to the popular “FIFA” franchise and the recent launch of “F1”.
Suh also said the company was not “completely immune” to rising inflation.
“There are parts of the business that I think are doing better and parts of the business that are maybe doing a little worse than we would have anticipated even a few months ago.”
Net income for the quarter ended June 30 rose to $311 million, or $1.11 per share, from $204 million, or 71 cents per share, a year ago.
Earlier on Tuesday, Spanish sports league LaLiga said the California-based company’s EA Sports unit will replace Spanish bank Santander (BME:SAN) as the title sponsor of LaLiga soccer competitions.
