Electronic Arts stock sinks after Q3 miss
Yahoo Finance Live anchors discuss third-quarter earnings for Electronic Arts.
JULIE HYMAN: All right, let's take a look at Electronic Arts. It takes a hit after missing analysts' estimates in its latest quarter, citing impacts from the current macro environment. The video game company also is reducing its guidance for the full year 2023. Those shares taking a hit of 11% this morning.
The company says, "Net bookings for its fourth quarter are gonna be $1.68 to $1.78 billion." The estimate from analysts was $2.22 billion. That's its fiscal fourth quarter. Obviously, it's not on the calendar year. So you know, that's not good news here. And analysts here definitely not happy about these numbers and talking about that, essentially, the new games are just not selling as well as they should be.
BRAD SMITH: Yeah, "FIFA" was good. But there was one thing that I highlighted within this, performance of new games. And they did have some strong reviews for those new games, as they noted, within the "Apex" franchise. However, it was still below the levels that they had anticipated. That trickled through to some of the actual results. And they still have this softer net bookings trend. And you can expect that to remain intact for at least the foreseeable near-term future.
BRIAN SOZZI: And one structural problem I want to call attention to. And actually this was brought up by Jefferies Andrew Uerkwitz, who covers the space. "Increasing game complexity." So these games are just getting increasingly complex to make. And with that, that comes higher costs, potential game delays. And it's not just an EA thing, it's an Activision Blizzard thing and it's a Take-Two thing. And it certainly has been a Take-Two thing because they've reported two disappointing quarters and have really let Wall Street down.
BRAD SMITH: That's why I stuck to "Tiger Woods PGA TOUR Golf."
BRIAN SOZZI: Best game ever.
JULIE HYMAN: Well, and I'm not-- I'm not a big gamer but like aren't most games, at this point, don't you have to kind of watch a video on YouTube to figure out how to--
BRIAN SOZZI: They're very hard, Julie.
JULIE HYMAN: --get to the next layer--
BRIAN SOZZI: You know, you're right on.
JULIE HYMAN: --of the game.
BRIAN SOZZI: You're right on. You can't pick up the controller and play these anymore.
JULIE HYMAN: Right.
BRAD SMITH: You got to study just to do well. It's a part-time job, full time.