Investing.com -- Electronic Arts slumped sharply after the video game maker cut its bookings guidance for the third quarter and the full year following weaker demand for its soccer franchise, EA Sports FC, and role-playing game Dragon Age.
Electronic Arts Inc (NASDAQ:EA) sank more than 14% in premarket trading Thursday.
For the fiscal third quarter ending Dec. 31, EA said it now expects to report about $2.22 billion in net bookings, down from prior guidance of $2.4B to $2.55B. Earnings for the December quarter is expected to come in at $1.11 per diluted share on revenue of about $1.88B, compared with prior guidance for diluted earnings of $0.85 to $1.02 on revenue of $1.88B to $2.03B.
“During Q3, we continued to deliver high-quality games and experiences across our portfolio,” EA CEO Andrew Wilson said on Wednesday. “However, Dragon Age and EA SPORTS FC 25 underperformed our net bookings expectations.”
The drag on Q3 performance is expected to dent full-year net bookings, which are now expected in a range of $7B and $7.15B, compared with prior guidance of $7.5B to $7.8B.
Following the announcement, Raymond (NSE:RYMD) James analysts downgraded the stock to Market Perform from Outperform.
"The magnitude of the shortfall is concerning, especially coming so closely after the optimistic tone struck on September’s Investor Day," analysts led by Andrew Marok said in a note.
"Given the lower visibility into near-term trends in the company’s flagship franchise and the doubts its casts on forward execution, we move to the sidelines."
BMO Capital Markets analyst Brian J. Pitz also cut its EA estimates and rating to Market Perform, "accounting for softness in EA Sports FC 25, Dragon Age: The Veilguard, and an unclear FY26E pipeline headed into a challenging competitive environment ahead."
