As some of you know, Electronic Arts stock has been doing great for the last several months, with many analysts putting it in their top ten list of performers. As I still own several hundred shares of EA stock, I’ve been watching the price intently. The share price hit an all-time high of just over $75 recently and I seriously thought about selling it all for a nice profit. I didn’t though and today, EA released their latest quarterly earnings results.
Despite the earnings report for the last three months exceeding Wall Street’s estimates, shares of EA dropped as much as 5% or more than $3 in after hours trading. This was because EA’s earnings outlook for the future was lower than what analysts had predicted. Shares dropped to about $69 initially after hours but it seems to have stabilized to just above $70. It’ll be interesting to see what happens once the market opens again tomorrow morning.
The stock probably won’t hit $75 again for a few months (and there’s a chance it won’t ever get there again). The next opportunity for a jump in stock price is after this Christmas, when sales of Star Wars: Battlefront are included. This title is expected to bring in massive sales for the company but it’s also saddled with massive expectations from financial analysts. I’ve read some people are expecting the game to sell 14 to 15 million copies, which is an astounding amount, even with the draw of Star Wars factored in. I can see a situation where Battlefront sells 12 million copies, which brings in new revenue that wasn’t there year over year, but that still disappoints Wall Street and the stock price drops. It seems stupid but that’s how the stock market works.
In hindsight, maybe I should have sold everything a few weeks ago. Well, it’s all moo now. I have to ride this out until after Christmas.