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What's in the Cards for Activision (ATVI) in Q4 Earnings?
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Activision Blizzard is set to report fourth-quarter 2018 results on Feb 12.
The company delivered average four-quarter positive earnings surprise of 20.7%. In the last reported quarter, the company reported non-GAAP earnings of 42 cents per share, which declined 5% from the year-ago quarter.
Net revenues (including deferrals) declined 6.6% year over year to $1.51 billion.
For fourth-quarter 2018, Activision expects revenues and earnings to be $2.24 billion and 64 cents per share, respectively.
The Zacks Consensus Estimate for the quarter to be reported is pegged at $1.29 per share, indicating year-over-year growth of 37%. However, the figure is down 0.8% over the past 30 days.
Further, the consensus mark for revenues is pegged at $3.05 billion, indicating growth of 15.5% from the year-ago quarter
Let’s see how things are shaping up for the upcoming announcement.
Call of Duty: Black Ops 4 to Drive User Engagement
Activision’s Call of Duty is one of the biggest growth drivers for the company. In fourth-quarter 2018, the company launched its highly anticipated game Call of Duty: Black Ops 4. The title became an instant hit as it generated record digital sales on the first day of release.
Notably, the first-day digital sales of Call of Duty: Black Ops 4 broke the franchise record set in 2017 by Call of Duty: WWII, per management. Additionally, new Battle-Royale (BR) mode Blackout feature is expected to give it an edge over Tencent Holding’s (TCEHY - Free Report) PlayerUnknown’s Battlegrounds and Epic Games’ Fortnite.
Moreover, Call of Duty: Black Ops 4’s remarkable feature, League Play, allows users not only to participate in the League but also watch the Call of Duty World League (CWL) streamed events. This is expected to drive user engagement, which is a positive.
Other Key Releases
Activision launched Candy Crush Friends Saga in the soon-to-be reported quarter. The game’s new features coupled with King Digital’s Candy Crush popularity is expected to aid mobile revenues, which declined 2.1% year over year to $523 million in third-quarter 2018.
Notably, King Digital’s Candy Crush Saga and Candy Crush Soda Saga continue to be two of the top 10 grossing games on iOS and Android app stores (U.S.).
Additionally, the company unveiled its latest expansion to Hearthstone, Rastakhan’s Rumble. Hearthstone, free digital collectible card game, based on Activision’s Warcraft universe had more than 100 million players as of Nov 5, 2018. Moreover, the company launched the Spyro Reignited Trilogy in the soon-to-be reported quarter.
Competition
Activision’s competitors Electronic Arts (EA - Free Report) and Take Two (TTWO - Free Report) unveiled Battlefield V and Red Dead Redemption 2 over the same period.
Moreover, EA released FIFA 19 on Sep 28, 2019, which won the best sports award at the Electronic Entertainment Expo (E3) 2018. Additionally, the company released The Sims 4 Get Famous expansion pack. Both the titles aided its bottom line in third-quarter fiscal 2019.
Further, Take Two’s Red Dead Redemption 2 recorded the biggest opening weekend in retail sell-through across all entertainment releases (over $725 million). Additionally, it was the best-selling video game of 2018 in the United States based on combined physical and digital sales.
The release of popular titles is expected to increase competition, which is likely to impact Activision’s top-line growth.
Activision currently carries a Zacks Rank #4 (Sell).
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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What's in the Cards for Activision (ATVI) in Q4 Earnings?
Activision Blizzard is set to report fourth-quarter 2018 results on Feb 12.
The company delivered average four-quarter positive earnings surprise of 20.7%. In the last reported quarter, the company reported non-GAAP earnings of 42 cents per share, which declined 5% from the year-ago quarter.
Net revenues (including deferrals) declined 6.6% year over year to $1.51 billion.
For fourth-quarter 2018, Activision expects revenues and earnings to be $2.24 billion and 64 cents per share, respectively.
The Zacks Consensus Estimate for the quarter to be reported is pegged at $1.29 per share, indicating year-over-year growth of 37%. However, the figure is down 0.8% over the past 30 days.
Further, the consensus mark for revenues is pegged at $3.05 billion, indicating growth of 15.5% from the year-ago quarter
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 the upcoming announcement.
Call of Duty: Black Ops 4 to Drive User Engagement
Activision’s Call of Duty is one of the biggest growth drivers for the company. In fourth-quarter 2018, the company launched its highly anticipated game Call of Duty: Black Ops 4. The title became an instant hit as it generated record digital sales on the first day of release.
Notably, the first-day digital sales of Call of Duty: Black Ops 4 broke the franchise record set in 2017 by Call of Duty: WWII, per management. Additionally, new Battle-Royale (BR) mode Blackout feature is expected to give it an edge over Tencent Holding’s (TCEHY - Free Report) PlayerUnknown’s Battlegrounds and Epic Games’ Fortnite.
Moreover, Call of Duty: Black Ops 4’s remarkable feature, League Play, allows users not only to participate in the League but also watch the Call of Duty World League (CWL) streamed events. This is expected to drive user engagement, which is a positive.
Other Key Releases
Activision launched Candy Crush Friends Saga in the soon-to-be reported quarter. The game’s new features coupled with King Digital’s Candy Crush popularity is expected to aid mobile revenues, which declined 2.1% year over year to $523 million in third-quarter 2018.
Notably, King Digital’s Candy Crush Saga and Candy Crush Soda Saga continue to be two of the top 10 grossing games on iOS and Android app stores (U.S.).
Additionally, the company unveiled its latest expansion to Hearthstone, Rastakhan’s Rumble. Hearthstone, free digital collectible card game, based on Activision’s Warcraft universe had more than 100 million players as of Nov 5, 2018. Moreover, the company launched the Spyro Reignited Trilogy in the soon-to-be reported quarter.
Competition
Activision’s competitors Electronic Arts (EA - Free Report) and Take Two (TTWO - Free Report) unveiled Battlefield V and Red Dead Redemption 2 over the same period.
Moreover, EA released FIFA 19 on Sep 28, 2019, which won the best sports award at the Electronic Entertainment Expo (E3) 2018. Additionally, the company released The Sims 4 Get Famous expansion pack. Both the titles aided its bottom line in third-quarter fiscal 2019.
Further, Take Two’s Red Dead Redemption 2 recorded the biggest opening weekend in retail sell-through across all entertainment releases (over $725 million). Additionally, it was the best-selling video game of 2018 in the United States based on combined physical and digital sales.
The release of popular titles is expected to increase competition, which is likely to impact Activision’s top-line growth.
Activision currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>