EA misses targets and lowers forecasts for annual bookings
Video game publisher Electronic Arts forecasted full-year bookings for the coming year that fell below Wall Street’s expectations.
It cited weak continued spending on its FC 24 soccer game and Madden NFL 24 as well as an uncertain economic outlook.
The Redwood City, California-based company saw its shares fall 4.75% to $124.05 in after-hours trading. The weak news comes on the same day as Microsoft’s announcement that it would close multiple studios today on similar concerns. In just four months, the layoffs in the game industry are just about at the same level as the 10,500 layoffs that happened in 2023. Last night, Nintendo also missed earnings targets and forecast a relatively weak year ahead.
Gamers have been cutting back on discretionary spending as they return to post-COVID activities such as heading outdoors or traveling. EA cut about 5% of its workforce in February as part of its own restructuring program.
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“This year, EA delivered bigger, bolder world class entertainment that engaged and connected hundreds of millions of players and fans,” said Andrew Wilson, CEO of EA, in a statement. “We will continue to build on this strong momentum through an incredible pipeline of new experiences, starting with College Football in FY25, positioning us for accelerated growth in FY26 and beyond.”
“EA’s FY24 was highlighted by record cash flow and strong earnings growth driven by EA SPORTS FC and Madden NFL,” said Stuart Canfield, CFO of EA, in a statement. “With strong conviction in our future, we are announcing an expanded stock repurchase program. We look forward to sharing more about our long-term strategy and financial framework at our investor day this fall.”
The company forecast fiscal year 2025 bookings at about $7.5 billion, compared to expectations of $7.76 billion, for the year ended March 31, 2025.
For the fourth fiscal quarter just ended on March 31, the company posted bookings of $1.67 billion, missing estimates of $1.77 billion. And in the first quarter, EA said books would be $1.15 billion and $1.25 billion, compared with estimates of $1.44 billion.
The company earned $1.37 per adjusted share in the fourth quarter, compared with estimates of $1.52 per share.
