‘Apex Legends’ helps EA post better-than-expected first-quarter revenue

Video game publisher Electronic Arts Inc reported better-than-expected first-quarter revenue on Tuesday, riding on the success of its battle royale game "Apex Legends", sending its shares up as much as 5% in extended trading.

Revenue from the company's live services, which was a key growth driver - boosted by FIFA Ultimate Team, rose almost 20% to $731 million from a year ago.

"We have very strong live services driven by Apex Legends and The Sims 4 as well as our Sports Ultimate team," Chief Operating Officer and CFO Blake Jorgensen told Reuters. Season 2 in Apex Legends was launched on July 2.

Game franchises such as "Battlefield" and "FIFA" are among the company's most important, but the rise of mobile-based, free-to-play games with engaging formats are challenging the dominance of traditional game publishers.

Battle royale games, in which players fight each other to death until the last survivor, became wildly popular in 2018 thanks to "PUBG" and Epic Games' "Fortnite".

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On an adjusted basis, EA's revenue was $743 million in the first quarter, beating the average analyst estimate of $719.2 million.

EA, however, expects second-quarter adjusted revenue of $1.23 billion, below analysts' estimates of $1.24 billion, according to Refinitiv data.

The company maintained its full-year adjusted revenue forecast of $5.10 billion, below estimates of $5.18 billion.

The company's net income rose to $1.42 billion, or $4.75 per share, in the quarter ended June 30, from $293 million, or 95 cents per share, a year earlier. Net income was boosted by $1.08 billion of income tax benefits. Shares of the company were up at $91.60.