Despite Some Negative Publicity, EA's Got Game
We're raising our fair value estimate on the narrow-moat game-maker due to better than expected leverage on its gross margin line.
Net revenue of $1,160 million (up 1% year over year) was in line with guidance of $1,135 million. Total revenue from consoles grew 2% to $810 million, as the strong growth for the current consoles (up 8%) was partially offset by the ongoing decline for older consoles (down 62%). Mobile continues to expand for EA, with revenue up 12% year over year, as mobile sports games continue to gain traction. Digital sales continue to drive overall growth as the category increased to 64% of sales on a trailing 12-month basis versus 57% a year ago. Despite removing microtransactions from Battlefront II, live services revenue was up 27% on a trailing 12-month basis versus the third quarter of fiscal 2017 as Ultimate Team modes in both FIFA and Madden continue to grow in popularity.
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