Activision Blizzard Earnings: Here’s Why Shares are Up

Activision Blizzard, Inc. (NASDAQ:ATVI) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 5.14%.

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Activision Blizzard, Inc. Earnings Cheat Sheet

Results: Net income increased 257.58% to $354 million (78 cents per diluted share adjusted ) in the quarter versus a net gain of $99 million in the year-earlier quarter.

Revenue: Rose 25.66% to $1.77 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Activision Blizzard, Inc. reported adjusted net income of 78 cents per share. By that measure, the company beat the mean analyst estimate of $0.72. It missed the average revenue estimate of $2.44 billion.

Quoting Management: Bobby Kotick, Chief Executive Officer, Activision Blizzard, said, “We are very pleased to report that Activision Blizzard delivered the best performance in its history. With better-than-expected net revenues, record operating margins and record earnings, and over $1.3 billion in operating cash flow, we continue to set the industry success bar. I would like to thank our incredibly talented employees around the world for their passion, drive and creativity, which continues to fuel our success.”

Key Stats (on next page)…

Revenue increased 110.23% from $841 million in the previous quarter. Net income increased 56.64% from $226 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.09 to a profit $0.1. For the current year, the average estimate has moved up from a profit of $1.09 to a profit of $1.12 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)