Diamonds and Dogs

5/11/16

The force is with today's diamond. Electronic Arts (EA) is climbing over 13% following better than expected earnings last night. The company reported revenue of $924 million above Wall Street consensus of $888.8 million. The company also produced its most-ever profits of $1 billion with 71.4% gross margin and $1.2 billion in operating cash flow. One major factor for the bump in sales and profits was due to the release of "Star Wars Battlefront" at the end of the year. Mobile games also helped their numbers. During the quarter the company also repurchased 15.7 million shares of stock for $1 billion, good for an average price of $63.69 per share, well below the current $73-per-share price.

Today's dog is a real fossil with shoppers. The fashion accessories designer, Fossil (FOSL) is getting hit hard down over 28% after sharply missing earnings estimates. On the bottom line, net income declined 84.8% to $5.8 million, or $0.12 per share. Fossil also anticipates second-quarter diluted earnings per share in a range of breakeven to $0.15, compared to consensus estimates calling for earnings of $0.59 per share. Basically not even close. The good news is Fossil has a repurchase program in place for $825 million so if the company wants to buy back their stock, they'll be buying it back at six year lows.