Needham & Company Maintains a 'Hold' on Electronic Arts (ERTS); Acquisition of PopCap Expands Digital Offering And Should Strengthen Future
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Price: $19.84 -1.93%
Rating Summary:
6 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
Rating Summary:
6 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
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Needham & Company maintains a 'Hold' on Electronic Arts (NASDAQ: ERTS).
Needham analyst says, "ERTS announced an agreement to acquire PopCap Games, a leading online/social/mobile games provider. The purchase price is
$650 mm in cash, $100 mm in stock, and earning out payments that under optimal circumstances could result in additional payments of up to $550 mm. The acquisition is expected to be immediately accretive, excluding transaction and other non-costs. In addition, the company updated its earnings guidance, indicating the 1Q (June) revenue and EPS were ahead of previous guidance and our estimates, although 2Q (Sept.) EPS would be below our estimate. We are adjusting our EPS forecasts for the better-thanexpected 1Q, as well as the shift of some expenses from 3Q to 2Q. We have raised our full year 2012 non-GAAP EPS estimate by $0.05 to $0.90 (excluding transaction costs). We are maintaining our 2013 estimate at $1.20 and our 2014 EPS estimate at $1.40. While we acknowledge that this acquisition substantially augments ERTS’ digital presence, we believe the upside is reflected in the current stock price, so we are maintaining our Hold rating."
For more ratings news on Electronic Arts click here and for the rating history of Electronic Arts click here.
Shares of Electronic Arts closed at $23.91 yesterday.
Needham analyst says, "ERTS announced an agreement to acquire PopCap Games, a leading online/social/mobile games provider. The purchase price is
$650 mm in cash, $100 mm in stock, and earning out payments that under optimal circumstances could result in additional payments of up to $550 mm. The acquisition is expected to be immediately accretive, excluding transaction and other non-costs. In addition, the company updated its earnings guidance, indicating the 1Q (June) revenue and EPS were ahead of previous guidance and our estimates, although 2Q (Sept.) EPS would be below our estimate. We are adjusting our EPS forecasts for the better-thanexpected 1Q, as well as the shift of some expenses from 3Q to 2Q. We have raised our full year 2012 non-GAAP EPS estimate by $0.05 to $0.90 (excluding transaction costs). We are maintaining our 2013 estimate at $1.20 and our 2014 EPS estimate at $1.40. While we acknowledge that this acquisition substantially augments ERTS’ digital presence, we believe the upside is reflected in the current stock price, so we are maintaining our Hold rating."
For more ratings news on Electronic Arts click here and for the rating history of Electronic Arts click here.
Shares of Electronic Arts closed at $23.91 yesterday.
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