Electronic Arts Inc. (EA) has reported a 37.04 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $566 million, or $1.81 a share in the quarter, compared with $899 million, or $2.79 a share for the same period last year. Revenue during the quarter grew 16.74 percent to $1,527 million from $1,308 million in the previous year period. Gross margin for the quarter expanded 405 basis points over the previous year period to 86.77 percent. Total expenses were 53.05 percent of quarterly revenues, down from 59.02 percent for the same period last year. This has led to an improvement of 598 basis points in operating margin to 46.95 percent.
Operating income for the quarter was $717 million, compared with $536 million in the previous year period.
"Fiscal 2017 was a milestone year for Electronic Arts, defined by groundbreaking games and live services that delivered more fun and connected more players with their friends," said chief executive officer Andrew Wilson. "In Fiscal 2018, we are focused on innovating for our players with extraordinary new experiences across our portfolio, continuing to grow our global network, and extending our reach across new platforms and more ways to play."
For the first-quarter 2018, Electronic Arts Inc. projects revenue to be $1,425 million. The company expects net income to be $605 million. The company forecasts diluted earnings per share to be $1.93.
For fiscal year 2018, Electronic Arts Inc. projects revenue to be $5,075 million. The company expects net income to be $1,125 million. The company forecasts diluted earnings per share to be $3.57.
Operating cash flow improves
Electronic Arts Inc. has generated cash of $1,383 million from operating activities during the year, up 13.08 percent or $160 million, when compared with the last year. The company has spent $759 million cash to meet investing activities during the year as against cash outgo of $484 million in the last year.
The company has spent $534 million cash to carry out financing activities during the year as against cash outgo of $306 million in the last year period.
Cash and cash equivalents stood at $2,565 million as on Mar. 31, 2017, up 2.89 percent or $72 million from $2,493 million on Mar. 31, 2016.
Working capital increases sharply
Electronic Arts Inc. has recorded an increase in the working capital over the last year. It stood at $2,784 million as at Mar. 31, 2017, up 43.80 percent or $848 million from $1,936 million on Mar. 31, 2016. Current ratio was at 2.15 as on Mar. 31, 2017, up from 1.80 on Mar. 31, 2016.
Days sales outstanding went up to 11 days for the quarter compared with 8 days for the same period last year.
At the same time, days payable outstanding went up to 19 days for the quarter from 18 for the same period last year.
Debt comes down
Electronic Arts Inc. has recorded a decline in total debt over the last one year. It stood at $990 million as on Mar. 31, 2017, down 13.91 percent or $160 million from $1,150 million on Mar. 31, 2016. Total debt was 12.83 percent of total assets as on Mar. 31, 2017, compared with 16.31 percent on Mar. 31, 2016. Debt to equity ratio was at 0.24 as on Mar. 31, 2017, down from 0.34 as on Mar. 31, 2016.
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