Electronic Arts (ERTS) is scheduled to release Q3 earnings this Monday February 8, after the market closes.
Average analyst estimates for the electronic game maker are $.31/share in EPS and $1.34 billion in Revenue. Twenty-Six analysts track the stock with one upward EPS revision in the last 30 days and no downward EPS revisions in the last 30 days.
Last quarter, Electronic Arts missed average analysts expectations by .01/share or 14.3%, .06/share vs. .07/share.
I always find this a tough period waiting to see if the company is going meet, exceed, or miss their earnings estimates. One thing I have discovered of value is to analyze sentiment moves in a stock ahead of the company’s earnings release. In the case of Electronic Arts, I will use the piqqem sentiment index for Electronic Arts to see how sentiment has changed in the last quarter, for the months within that quarter, and from the end of the reporting quarter thru today.
I’m looking for moves or changes that may foreshadow the earning release. (piqqem leverages the ‘wisdom of crowds’ by allowing its users to vote on the price direction of a stock and then applies its own propriety factors to calculate sentiment for a security. In their model, -100 is the lowest and 100 is the highest sentiment).
Sentiment for Electronic Arts
Source Piqqem
The above chart shows Electronic Arts’ sentiment peaking on October 31, 2009 and then dropping by 13 pts thru today. The chart also shows a 7 pt decrease in sentiment from the end of Q4 thru today. This last indicator has historically been the most accurate indicator regarding an earnings surprise, both upside and downside. Sentiment for the S&P is down 2 pts this year, so some of Electronic Arts downward movement in sentiment can be attributed to market, but most of the drop can be linked directly to ERTS. On the Piqqem scale, Electronic Arts’ sentiment rating of 15.26 is considered a hold and its absolute sentiment indicates a moderate quality stock. Only Electronic Arts knows their actual results, but their current sentiment points to Electronic Arts having a tough third quarter.
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