Electronic Arts climbs after strong quarter

Shares in Electronic Arts, maker of the Fifa and Madden NFL video games, rallied after the company topped expectations for fiscal fourth-quarter results and announced a $1bn share buyback programme.

The California-based company said adjusted profits fell 18 per cent from a year earlier to $125m, or 39 cents a share, in the three months to the end of March.

Adjusted revenues, which defers some revenue from online games, slipped 2 per cent to $896m in the period. Analysts had forecast earnings of 26 cents a share on sales of $850m.

Electronic Arts said Battlefield Hardline, Dragon Age: Inquisition, Fifa 15, Madden NFL 15 and Battlefield 4 were among its best-performing games.

Monthly active users for its mobile titles averaged more than 165m in the period, up from 160m in the prior quarter. The company also said that its mobile revenue hit a new record of $524m for the full fiscal year.

More broadly, Ben Schachter, an analyst at Macquarie, said US video game publishers will benefit from less competition among AAA titles - high-quality, big budget games - high average revenue per user and rising margins.

"The bottom line is that we continue to like the video game group both for the improving financial metrics and for the strategic value of its content for emerging platforms and geographies," he said.

Shares in Electronic Arts, which have gained more than 100 per cent in the past year, rose 4 per cent to $61.25.

Fossil was among the biggest decliners on the benchmark index, after analysts at Cowen & Co downgraded the stock to "market perform" from "outperform" and lowered their target price from $92 to $90.

"Fossil has a top brand portfolio, attractive margins & strong global profile; but, we fear watch industry growth may further contract, expect tightening inventories at retail, and note mixed performance across brands," said Oliver Chen, an analyst at Cowen & Co.

He also added that their surveys suggest the Apple Watch has so far been a negative for Fossil.

The US watchmaker reported first-quarter earnings that topped Wall Street estimates but sales that missed forecasts.

The Texas-based company maintained its full-year guidance on a constant currency basis but warned that it expects results "will be significantly negatively impacted by foreign currency changes as well as restructuring charges".

Fossil shares declined 10 per cent to $77.79.

Shares in Chesapeake Energy fell 6 per cent to $14.86 after the oil and gas producer reported a first-quarter loss driven by an impairment charge.

The Oklahoma City-based company reported a loss of $3.8bn, or $5.72 per diluted share, compared with profits of $374m or 54 cents a share in the year ago period.

On an adjusted basis, the company reported earnings of 11 cents a share. Sales fell 45 per cent to $2.8bn.

Analysts at Jefferies downgraded the stock to "underperform" from "hold" and lowered their price target to $12 from $13.

US stocks declined for a second straight day following disappointing economic data and after Federal Reserve chairwoman Janet Yellen said stock valuations are "quite high" at a conference sponsored by the Institute for New Economic Thinking.

The S&P 500 fell 0.2 per cent to 2,083.61, the Dow Jones Industrial Average slid 0.3 per cent to 17,866.81 and the Nasdaq Composite declined 0.3 per cent to 4,924.89.

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