Electronic Arts Inc. (NASDAQ:EA) reported first quarter earnings on May 5th. They delivered a strong beat on revenue with $896 million net revenue versus $830 million guidance and per share profit of 39 cents. Expectations were for $775 million revenue and 19 cents per share according to Thomson Reuters. Earnings per share for the same quarter in 2014 was 48 cents per share.
Andrew Wilson, CEO, stated in the Q4 and Full Year 2015 Earnings Report, “With a clear focus on putting our players first, FY15 was an exceptional year for Electronic Arts. We introduced award-winning games, delivered enduring entertainment in our live services, and forced deeper relationships with a growing global audience across consoles, mobile devices, and PC.” While this quarter was below first quarter 2014, it was well above expectations. The company attribute the earnings beat to strength in the mobile gaming sector and popularity of their PlayStation games.
Share Repurchase Program
In addition to the earnings and revenue beat, Electronic Arts has announced approval by the Board of Directors for a $1 billion buy back of stock. The stock buy back will run through 2017. A share repurchase program is common among companies have excess cash reserves and feel their share price is under valued. By purchasing shares on the open market or from insiders, the company is reducing the supply of shares available. This in turn results in an increase in share value. Share buyback, or repurchase programs, are a way of the company returning value to shareholders.
Closing Maxis Emeryville
The Company has made a move to focusing more on digital games. In combination with this effort, Electronic Arts recently made the decision to close their Maxis Emeryville office. Maxis Emeryville was the creator of the Sim City series popular as early as the 1990’s. Maxis was founded in 1987 and was later purchased by Electronic Arts in 1997.
Electronic Arts was founded in 1982 and is based out of Redwood City, California. They are a provider and creator of video games, computer games, and more recently, mobile games.