Activision Blizzard Earnings: Increasing Costs Tighten Margins as Net Income Falls

Although Activision Blizzard Inc ‘s (NASDAQ:ATVI) net income fell in the second quarter from a year earlier, profit exceeded analysts’ expectations. Activision Blizzard is an online, personal computer, console, and handheld game publisher.

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Activision Blizzard Inc Earnings Cheat Sheet

Results: Net income for the toys/game/hobby fell to $185 million (16 cents per share) vs. $335 million (29 cents per share) a year earlier. This is a decline of 44.8% from the year-earlier quarter.

Revenue: Fell 6.2% to $1.07 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Activision Blizzard Inc beat the mean analyst estimate of 10 cents per share. It beat the average revenue estimate of $551.9 million.

Quoting Management: Bobby Kotick, Chief Executive Officer of Activision Blizzard, said, “On a non-GAAP basis, we delivered record Q2 and first half net revenues, operating income and earnings. Our performance was driven by strong audience demand for our great games. We are very excited to have announced our expanded investment in China through Activision Publishing’s agreement with Tencent to bring the Call of Duty franchise to the Chinese market.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 3 cents in the first quarter, by 4 cents in the fourth quarter of the last fiscal year, and by 5 cents in the third quarter of the last fiscal year.

Revenue has fallen for the past three quarters. In the first quarter, revenue declined 19.1% to $1.17 billion while the figure fell 1.5% in the fourth quarter of the last fiscal year from the year earlier.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the third quarter has risen to 9 cents per share from 8 cents. For the fiscal year, the average estimate has moved up from 88 cents a share to 92 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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