Electronic Arts (EA), the second-largest gaming company in the Americas and Europe by revenue, reported late on Tuesday a jump in first-quarter sales and earnings, with operating results above internal expectations.
Total net revenue increased to $1.21 billion during the three months that ended June 30, from $1.14 billion a year earlier, the Redwood City, California-headquartered company said in its earnings statement.
Group turnover advanced as FIFA Ultimate Team had more than three million players logging in daily during the ‘Team of the Season’ in-game event in the quarter. It further noted that The Sims 4 expansion packs and game pack downloads increased by 55% year-over-year.
Earnings of $4.75 per share, which includes the occurrence of three separate tax-related events in the first quarter, were also up from $0.95 per share a year earlier.
Electronic Arts said that it completed an internal transfer of some of its intellectual property rights to its Swiss subsidiary, a legal ruling required the company to record a tax accrual and the passing of a referendum in Switzerland, where its international business is headquartered, would change Swiss income tax rates once enacted.
As a result of these events, the company said that it expects to recognize an income tax benefit of $1.70 billion, or $5.61 of earnings per share, during the fiscal year ending March 31, 2020. It said that it recognized $1.08 billion of this income tax benefit during the three months ended June 30, 2019 and expected to recognize the remaining $620 million once the referendum was enacted, which it said it expects during the three months ending September 30, 2019.
“We delivered operating results significantly above our expectations, driven by broad strength across our core franchises. This quarter shows how the power of our portfolio strategy, combined with live services, delivers strong results,” Blake Jorgensen, chief operating officer of Electronic Arts, said. “We believe we have the right ingredients in place to deliver fun for our players and success for our business.”
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