Activision Blizzard $ATVI Beats Earnings But Waddles on Mixed Guidance

Video game publisher Activision Blizzard $ATVI reported second quarter earnings Thursday which easily beat consensus estimates as MAU’s soared. However the gaming company offered mixed guidance which saw the stock waddle.

Video game publisher Activision Blizzard $ATVI reported second quarter earnings Thursday which easily beat consensus estimates. However the gaming company offered mixed guidance which saw the stock waddle. There was a lot of optimism on these results after Take Two Interactive $TTWO Ripped 12% on Raised Guidance during the day session. Games like Games like Overwatch and World of Warcraft and the Call of Duty franchise have seen Activision Blizzard’s digital revenue soar. 

$ATVI had 407 million Monthly Active Users (MAUs) in 2Q17. Blizzard saw a 38% increase in MAUs YoY. Overwatch and Hearthstone both saw growth in MAUs. Activision saw a slight decrease in MAUs YoY. King reported a decline in MAUs YoY but saw better gross bookings per paying user.

Earnings: Earned 43 cents EPS excluding items versus an expected 30 cents  on sales of $1.42 billion beating the expected $1.22 billion. Under GAAP Activision earned 32 cents a share on sales that increased 4% to $1.63 billion, compared to $151 million or $0.20 per share in 2Q16.

 
Reaction: Activision Blizzard, Inc.  After-hours62.75 –1.22 (-1.91%) After closing up with $TTWO during the day 63.97USD +2.52 (+4.10%)

 
During 2Q17, $ATVI reported revenue declines in all three of its segments.
  • Activision segment revenues dropped 5% compared to 2Q16.
  • Blizzard segment reported a 24% decrease in revenues
  • King segment reported a 1% revenue drop versus the prior-year quarter.

 

Graphs via https://alphastreet.com/app#/company/ATVI

Guidance:

For the third quarter, Activision expects to earn 45 cents a share excluding items on adjusted revenue of $1.7 billion. Analysts had a expected 48 cents EPS and $1.65 billion in revenue. For 2017, $ATVI expects revenue of $6.40Bil, GAAP EPS of $1.05 and adjusted EPS of $1.94. For 3Q17, the company expects revenue to be $1.38Bil. 

Source: ATVI, TradersCommunity, AlphaStreet

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