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Activision (ATVI) to Report Q1 Earnings: What's in Store?

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Activision Blizzard (ATVI - Free Report) is set to report first-quarter 2021 results on May 4.

For the to-be-reported quarter, the company expects non-GAAP revenues of $2 billion and earnings of 59 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $1.75 billion, indicating an increase of 15.1% from the year-ago quarter’s reported figure.

The consensus mark for first-quarter earnings has declined 1.4% to 69 cents per share in the past 30 days. The projected figure suggests an increase of 18.9% from the year-ago quarter’s reported figure.

Notably, the company’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 26.2%.
 
Let’s see how things have shaped up prior to this announcement.

Activision Blizzard, Inc Price and EPS Surprise

Activision Blizzard, Inc Price and EPS Surprise

Activision Blizzard, Inc price-eps-surprise | Activision Blizzard, Inc Quote

Factors to Consider

Activision’s popular franchises, including Call of Duty (COD), Overwatch, Hearthstone, World of Warcraft, Candy Crush Saga and Candy Crush Friends Saga are expected to have attracted coronavirus-induced home-confined gamers in the to-be-reported quarter.

Activision’s top line is expected to have benefited from an expanding user base of COD, Hearthstone, World of Warcraft and King’s franchises. This is expected to have boosted in-games spending, thereby driving net bookings and the top line of this Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Activision expects net bookings of $1.75 billion for the first quarter of 2021. The launch of Call of Duty: Black Ops Cold War, a sequel to the original Call of Duty: Black Ops game, in the fourth quarter is expected to have gained popularity and attracted gamers in the to-be-reported quarter.

Activision’s King division announced the availability of Crash Bandicoot: On the Run! to download and play for free worldwide on iOS and Android mobile devices in the to-be-reported quarter.

Additionally, the company announced new expansion pack, Forged in the Barrens for Hearthstone.

Moreover, strong video game spending in the quarter bodes well for Activision. Per Venturebeat, which cited NPD data, U.S. video game sales in January, February and March increased 42%, 35% and 18%, respectively.

However, Activision faces stiff competition from the likes of Take Two Interactive Software (TTWO - Free Report) , Nintendo (NTDOY - Free Report) and Electronic Arts (EA - Free Report) apart from Tencent and Epic Games.

Nevertheless, Activision’s strong portfolio of games is expected to have boosted monthly active user base in the to-be-reported quarter.

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