EA forecasts fourth-quarter revenue below estimates, shares slip

(Reuters) – Electronic Arts Inc forecast fourth-quarter revenue below analysts’ estimates, weighed down by the delayed launch of its basketball title “NBA Live”, while its “Apex Legends” battles “Fornite” and “PUBG” to attract young gamers.

FILE PHOTO: The Electronic Arts Inc., logo is displayed on a screen during a PlayStation 4 Pro launch event in New York City, U.S., September 7, 2016. REUTERS/Brendan McDermid/File Photo

Shares of the Redwood, California-based company fell about 5% after the bell on Thursday.

The videogame publisher behind franchises like “FIFA” and “Battlefield” said it expects current-quarter adjusted revenue to be about $1.15 billion, below analysts’ expectations of $1.20 billion, according to IBES data from Refinitiv.

The disappointing forecast comes at a time when the dominance of console-based game franchises including rivals Activision Blizzard and Take-Two Interactive Software Inc is being threatened by mobile-based, free-to-play games with engaging formats.

EA has pushed back the release of “NBA Live” to coincide with the launch of new gaming consoles this year.

Analysts expect the console-focused game publishers to benefit from the launch of new gaming consoles from Microsoft and Sony at the end of the year.

EA beat third-quarter adjusted revenue estimates, powered by a strong launch of “Star Wars Jedi: Fallen Order” during the crucial holiday season.

“Star Wars Jedi: Fallen Order”, released in November climbed its way to become the second best-selling game of December, according to data from research firm NPD.

On an adjusted basis, the company’s revenue jumped 22.9% to $1.98 billion, beating the average analyst expectation of $1.97 billion.

Net income for the third quarter ended Dec. 31 rose to $346 million, or $1.18 per share, from $262 million, 86 cents per share, a year earlier.

Reporting by Ayanti Bera in Bengaluru; Editing by Maju Samuel

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