Electronic Arts Inc., VMware, Inc.: Earnings Preview

Electronic Arts Inc., VMware, Inc.: Earnings Preview

Electronic Arts Inc. (NASDAQ:EA) and VMware, Inc. (NYSE:VMW) are the two major companies scheduled to report their June quarter results on Tuesday after the market close. Electronic Arts shares gained 1.82% in pre-market trading Tuesday, while VMware inched up 0.16%. The gaming company has been reducing development costs and trying to maximize the profitability of existing offerings in an attempt to boost its bottom line. Let’s have a look at what analysts expect from each of them ahead of the official earnings release.

Electronic Arts Q1 earnings preview

The Redwood City-based company will be reporting its fiscal Q1, 2015 results on July 22 after the market closes. Analysts expect the company’s first-quarter losses to narrow from 40 cents last year to just 4 cents. Revenues are expected to jump 44.10% YoY from $495 million to $713.24. For the FY2015, Wall Street forecasts earnings to increase from $1.69 to $1.89. Full-year revenues are expected to rise a modest 3% from $4.02 billion to $4.14 billion.

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Electronic Arts recently said in its 10-K filing that the company will release only 10 games in 2015, down from 30 games in 2011. The company is focused on maximizing profitability of existing games. Its shares have soared a whopping 68% this year so far. Electronic Arts recently hired Ken Moss from eBay as its new CTO. Moss has also worked at Microsoft for more than two decades.

VMware Q2 earnings preview

The virtualization software company’s second-quarter earnings are expected to remain flat at $0.79 per share. Analysts expect its revenues to increase 16.10% YoY from $1.24 billion to $1.44 billion. For the full year, VMware’s revenues are expected to jump 15.70% from $5.21 billion to $6.02 billion. Full-year earnings are expected to rise from $3.37 per share to $3.52.

VMware plans to invest $500 million in India over the next three years. EMC Corporation (NYSE:EMC), which owns 80% of VMware, is under pressure from activist investment firm Elliott Capital Management to spin off VVMware.

VMware shares have gained 31% in the last 12 months.

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