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EA 'more optimistic than ever' as gaming boom intact, for now

'Apex Legends' creator EA's raised sales forecast misses estimates
'Apex Legends' creator EA's raised sales forecast misses estimates   -   Copyright  Thomson Reuters 2021
By Reuters

-Electronic Arts Inc on Wednesday forecast current-quarter adjusted sales above estimates, as the videogame publisher bets on a strong performance from mainstay titles like “FIFA 21″ and “Apex Legends”, sending its shares up nearly 5%.

Redwood City, California-based EA also raised its annual sales forecast, but that missed estimates, ahead of a likely slowdown in gaming as world economies inch back to normal, enticing gamers to ditch their consoles and step outside.

Rivals Take-Two and Activision Blizzard also forecast disappointing annual revenue earlier this week.

But for now, the pandemic-era gaming frenzy is on track.

“We are feeling more optimistic than we have ever felt in this business right now,” Chief Financial Officer Blake Jorgensen said in an interview, and people are engaging more with titles like “Battlefield” and “Apex Legends”.

EA had emerged as a clear pandemic winner after lockdowns drove people to spend more time and money on games, boosting its shares more than 30% last year, and investors are now closely watching its big bet on mobile offerings.

The company has been investing billions of dollars to bolster its mobile gaming lineup, bringing Glu Mobile, UK-based Codemasters and Playdemic Ltd under its marquee.

EA forecast second-quarter adjusted sales of $1.73 billion, exceeding Refinitiv IBES estimates of $1.51 billion. It also beat expectations in the first quarter ended June 30.

However, its full-year adjusted sales forecast of $7.40 billion came in lower than estimates of $7.45 billion and first-quarter net income fell 44% to $204 million, largely due to acquisition-related expenses.

On an adjusted basis, the company earned 79 cents per share, beating estimates of 67 cents.