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Electronic Arts Inc. shares climbed more than 1% in the extended session Tuesday, after the videogame giant reported higher-than-consensus figures for net bookings.
EA EA, -2.39% reported fiscal second-quarter net income of $854 million, or $2.89 a share, versus $255 million, which amounts to 83 cents a share, in the year-ago quarter. Revenue rose to $1.35 billion, versus $1.29 billion in the year-ago quarter.
During the quarter, EA recognized an income-tax benefit of $1.71 billion, or $5.74 a share, during fiscal 2020. In the fiscal second quarter, EA recognized $625 million, or $2.11 a share. The tax benefit occurred because the company transferred some of its intellectual property to its Swiss subsidiary and that country changed its tax rates. There was also a Ninth Circuit Court of Appeals decision that affected how EA accounts for stock-based compensation expenses.
Fiscal second-quarter net bookings rose to $1.28 billion from $1.22 billion, in the year-ago period. Bookings is a common non-generally accepted accounting principal financial term videogame companies use that includes physical and digital sales of games.
Analysts polled by FactSet expected adjusted earnings of 86 cents a share and bookings of $1.25 billion.
EA said it expects fiscal 2020 bookings of $5.13 billion and net income of $2.84 billion, which includes the one-time tax benefit of $1.71 billion. The company said it expects fiscal third-quarter net income of $272 million on bookings of $1.94 billion.
“It was an excellent second quarter for Electronic Arts. Our new EA Sports titles are thrilling core fans and bringing in new players, and our ongoing live services are growing with deeply-engaged communities,” Chief Executive Andrew Wilson said in a statement.
EA stock has gained 20% this year, as the S&P 500 index SPX, -0.08% rose 21%.
