(Reuters) - Video-game publisher Electronic Arts Inc’s (EA.O) adjusted quarterly profit handily beat analysts’ estimates, lifted by demand for high-margin digital downloads of its games such as “Battlefield 1”.
The results pushed up the company’s shares nearly 4 percent to $99.70 in after-market trading on Tuesday, putting them on track to open at a record high.
EA also forecast current-quarter adjusted profit above analysts’ average estimates and said it would buy back up to $1.2 billion of shares over a two-year period.
Sales from EA’s digital business surged 30.6 percent to $934 million in the fourth quarter ended March 31, as players increasingly buy games online rather than physical copies at retail stores.
However, EA’s profit fell to $566 million, or $1.81 per share, in the quarter, from $899 million, or $2.79 per share, a year earlier.
The year-earlier quarter included an income tax credit of $453 million.
Excluding items, EA reported a profit of 85 cents per share, handily beating the average analysts’ estimate of 75 cents, according to Thomson Reuters I/B/E/S.
The company’s revenue rose 16.7 percent to $1.53 billion in the quarter.
However, on an adjusted basis, revenue of $1.09 billion was in line with analysts’ expectation.
EA released its action role-playing videogame “Mass Effect: Andromeda” toward the end of its fourth quarter, with the game hitting No. 3 on market research firm NPD’s March list for top-selling games in the United States.
The company said it ended up deferring about $53 million in “Mass Effect: Andromeda” sales from the fourth quarter into the first quarter, because of deluxe editions of the game, which triggered a revenue deferral.
“We didn’t anticipate that,” Chief Financial Officer Blake Jorgensen told Reuters.
Videogame companies are required to defer some revenue from certain online-enabled games following a tweak to the U.S. accounting rules.
“Battlefield 1”, launched in October, was at No. 12 on the NPD list, which takes into account both digital downloads and physical copies.
The company forecast first-quarter adjusted profit of 25 cents per share, above analysts’ average estimate of 19 cents.
EA said it expected adjusted revenue of $750 million, slightly below expectations of $758.7 million.
Reporting by Anya George Tharakan in Bengaluru; Editing by Sriraj Kalluvila