Earnings Reports

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Video game publisher Activision Blizzard reported much better than expected fourth quarter earnings Thursday boosted by holiday sales of Call of Duty WWII. The gaming giant saw record bookings and guided higher. The gaming giant saw record bookings and guided higher.

Earnings

$ATVI reported adjusted earnings per share of 94 cents, up 2% year over year with adjusted revenue up 8% to $2.64 billion beating consensus of EPS of 93 cents and $2.55 billion. The gaming giant saw record bookings and guided higher.

Reaction Activision Blizzard Inc NASDAQ: $ATVI

Close February 9, 4:01 PM EST 67.08 ▲ 1.25 (+1.90%)

Note: Wild Stock market Day Open 66.99 High 67.78 Low 63.32 Close 67.08

Highlights

Segment revenue versus Street Account consensus estimates:

  • Activision: $1.34 billion vs. $1.40 billion expected
  • Blizzard: $599 million vs. $526.1 million expected
  • King: $516 million vs. $508.2 million expected

Preview of AlphaGraphic

Outlook

For the current quarter, $ATVI guided earnings per share of 31 cents on revenue of $1.28 billion, vs. consensus expectations for 43 cents and $1.42 billion.

For the full year, Activision expects adjusted earnings per share of $2.50 on adjusted sales of $7.45 billion, compared with consensus expectations of $2.57 in per-share earnings on sales of $7.4 billion.

Analyst Reactions

Jefferies analyst Timothy O'Shea issued a note after the gaming companies earnings; rating Activision a buy and raised his price target to 86 from 82.

  • "2018 EPS guidance seems especially encouraging given management's conservative nature,"
  • "Since 2011, Activision has ended the year on average 19% higher than the initial outlook, suggesting $3 (in earnings per share) could be achievable." .

Following the release Activision saw seven price target hikes and one price target cut.

Competitors

The other two of the big three U.S. video game publishers have already reported fourth-quarter results. Take-Two Interactive Software $TTWO reported mixed earnings on Wednesday with higher EPS but  sales missing views. Its sales guidance for the current quarter and next fiscal year also disappointed investors. On Jan. 30, Electronic Arts $EA also gave mixed results but the stock surged on its sales and earnings guidance for the March quarter.

Source: ATVI, TradersCommunity, AlphaStreet

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