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Can a Strong Game Lineup Aid Activision's (ATVI) Q4 Earnings?
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Activision Blizzard Inc is set to report fourth-quarter 2017 results on Feb 8.
Notably, the company beat the Zacks Consensus Estimate in each of the last four quarters; with an average positive surprise of 41.32%.
Last quarter, Activision reported non-GAAP earnings of 47 cents per share, down 4.1% from the year-ago period. Revenues (including deferrals) of $1.90 billion surpassed the Zacks Consensus Estimate of $1.74 billion. Excluding deferral revenues, the company reported sales of $1.62 billion, up 3.2% on a year-over-year basis.
The top-line growth was driven by strong digital revenues driven by Overwatch and a solid contribution from King Digital Entertainment.
For fourth-quarter 2017, Activision anticipates non-GAAP revenues and earnings to be $1.7 billion and 36 cents per share, respectively.
Let’s see how things are shaping up for this announcement.
Key Catalysts: Call of Duty: WWII & Destiny 2
Activision’s popularity is primarily riding on its well-known franchises, Call of Duty: WWII and Destiny 2, which are likely to fuel top-line improvement in the soon-to-be reported quarter.
During the quarter, the company launched Call of Duty: WWII across Sony’s PlayStation 4 and Microsoft’s Xbox One and Windows. Following the first three days after its release, the game reaped more than $500 million globally.
The company unveiled Destiny 2 for PC gamers on Oct 24, 2017. Additionally, on Nov 30, Activision and Bungie introduced Ghost Skill for Amazon Alexa to Destiny 2.
Per company data, Destiny 2 outsold the original Destiny and delivered the biggest PC launch in Activision publishing history. Unabated demand combined with enhanced updates is likely to expand the player base, beneficial to the company’s top-line growth in turn.
Per NPD, GfK/GSD and Activision’s internal estimates, Call of Duty: WWII and Destiny 2 were the #1 and #2 top-selling console video games of 2017, respectively, in North America.
Moreover, we expect Activision to gain from its competitor Electronic Arts’ (EA - Free Report) botched-up launch of Star Wars Battlefront 2, released on Nov 17, last year.
What Our Model Says
Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP, has a good chance of beating estimates. Activision has an Earnings ESP of +4.99% and a Zacks Rank #3. Hence, this combination increases the odds of a positive surprise this quarter.
Accordingly, the Sell-rated stocks (#4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.
Broadridge Financial Solutions (BR - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Can a Strong Game Lineup Aid Activision's (ATVI) Q4 Earnings?
Activision Blizzard Inc is set to report fourth-quarter 2017 results on Feb 8.
Notably, the company beat the Zacks Consensus Estimate in each of the last four quarters; with an average positive surprise of 41.32%.
Last quarter, Activision reported non-GAAP earnings of 47 cents per share, down 4.1% from the year-ago period. Revenues (including deferrals) of $1.90 billion surpassed the Zacks Consensus Estimate of $1.74 billion. Excluding deferral revenues, the company reported sales of $1.62 billion, up 3.2% on a year-over-year basis.
The top-line growth was driven by strong digital revenues driven by Overwatch and a solid contribution from King Digital Entertainment.
For fourth-quarter 2017, Activision anticipates non-GAAP revenues and earnings to be $1.7 billion and 36 cents per share, respectively.
Activision Blizzard, Inc Price and EPS Surprise
Activision Blizzard, Inc Price and EPS Surprise | Activision Blizzard, Inc Quote
Let’s see how things are shaping up for this announcement.
Key Catalysts: Call of Duty: WWII & Destiny 2
Activision’s popularity is primarily riding on its well-known franchises, Call of Duty: WWII and Destiny 2, which are likely to fuel top-line improvement in the soon-to-be reported quarter.
During the quarter, the company launched Call of Duty: WWII across Sony’s PlayStation 4 and Microsoft’s Xbox One and Windows. Following the first three days after its release, the game reaped more than $500 million globally.
The company unveiled Destiny 2 for PC gamers on Oct 24, 2017. Additionally, on Nov 30, Activision and Bungie introduced Ghost Skill for Amazon Alexa to Destiny 2.
Per company data, Destiny 2 outsold the original Destiny and delivered the biggest PC launch in Activision publishing history. Unabated demand combined with enhanced updates is likely to expand the player base, beneficial to the company’s top-line growth in turn.
Per NPD, GfK/GSD and Activision’s internal estimates, Call of Duty: WWII and Destiny 2 were the #1 and #2 top-selling console video games of 2017, respectively, in North America.
Moreover, we expect Activision to gain from its competitor Electronic Arts’ (EA - Free Report) botched-up launch of Star Wars Battlefront 2, released on Nov 17, last year.
What Our Model Says
Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP, has a good chance of beating estimates. Activision has an Earnings ESP of +4.99% and a Zacks Rank #3. Hence, this combination increases the odds of a positive surprise this quarter.
Accordingly, the Sell-rated stocks (#4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.
NVIDIA (NVDA - Free Report) has an Earnings ESP of +6.87% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadridge Financial Solutions (BR - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>