Electronic Arts (EA) — On May 6, this video game maker reported better-than-expected fiscal fourth-quarter earnings of $0.48 per share on revenue of $914 million. Analysts had only been expecting $0.11 on revenue of $812.4 million, and shares jumped 21% in one day.
Since that time, EA has been consolidating as Wall Street continues to digest good news. In addition to the $750 million share buyback program the company announced, it issued upbeat guidance for the upcoming quarter. Management said it expects revenue of $700 million and a loss of $0.05 per share versus analysts’ estimates of $632.7 million and a loss of $0.23 per share.
NPD Group announced that EA’s new first-person shooter gamed “Titanfall” was the best-selling game in the United States in April. EA also has gamers excited with its recently previewed FIFA 15 soccer game, due to be released this fall, and “Star Wars: Battlefront,” which is scheduled to come out in spring 2015.
EA hit a new 52-week high Tuesday, breaking out of a pennant bullish continuation pattern and closing near the high of the day. Based on the uptrending resistance level that has been in play since early December and the $8 price move the stock enjoyed before consolidating, we anticipate EA could easily move toward $43 based on the breakout point of the pennant at $35.
John Jagerson and Wade Hansen are the editors of SlingShot Trader, helping investors capture options profits trading the news by using a proprietary 100% news-driven trading platform that turns event-driven pricing inefficiencies into fast profits. Get in on the next trade and get 1 free month today.
New to options and need more personal guidance? Try our online options course: Strategic Investing and receive your first two weeks free by clicking here.
