Stocks were generally mixed on Wednesday morning, but the Nasdaq Composite (^IXIC 1.37%) was able to provide at least a modest bounce after a big drop on Tuesday. As of 11 a.m. EDT, the Nasdaq was up about half a percent, as investors got a little more comfortable with the idea that growth stocks might not suffer huge declines after their big gains over the past year.
Earnings continue to provide some upward momentum for some Nasdaq stocks, and today's beneficiary was video game giant Activision Blizzard (ATVI). In addition, economic reopening themes are helping some industries, and Caesars Entertainment (CZR -1.06%) saw an upward surge on hopes that the casino resort business will be back in full force before 2021 is done.
Activision scores a win
Shares of Activision Blizzard were up more than 4% on Wednesday morning. Investors reacted positively to news of the video game company's most recent quarterly results.
The numbers Activision Blizzard reported were much better than expected by most, including the company itself. Revenue climbed 27% to $2.28 billion, easily eclipsing the $2.02 billion in sales that Activision Blizzard had projected in February. Similarly, adjusted earnings of $0.98 per share were higher by 29% year over year and were far better than the $0.84 per share forecast from the video game maker.
Within the company, numbers were mixed. The Activision segment did extremely well, with sales climbing 72% driven by a 40% rise in monthly active users playing various games in the Call of Duty franchise. The Blizzard division had to make do with a more modest 7% rise in segment revenue, and the King mobile game segment hit an all-time high for revenue as Candy Crush performed well.
Activision has high hopes that the remainder of the year will go well, projecting adjusted earnings of $3.42 per share. Even as people return to work and have less time stuck at home playing video games, Activision believes that its competitive advantages will give it an edge in a fast-growing market.
Caesars looks for a jackpot
Meanwhile, Caesars Entertainment gained more than 5% Wednesday morning, pushing its share price above the $100 mark. The casino company's first-quarter results still showed some signs of pandemic-provoked challenges, but Caesars has high hopes for the future.
Caesars' numbers for the first quarter were mixed. Revenue of $1.7 billion was up sharply from year-ago levels, but a large portion of the gain was attributable to corporate restructuring that occurred over the course of the past year. Accounting for those impacts, same-property revenue was down 16% year over year. Caesars also saw net losses balloon to $423 million, more than double the year-ago quarter's red ink. However, adjusted pre-tax operating earnings improved 23% compared to the previous year's period.
CEO Tom Reeg made positive statements during the conference call following the earnings release. Reeg expects that casinos will be popular destinations as the economy reopens, and Caesars properties in particular will do well because many of them are located in regional gambling centers that don't require as much travel by air. Moreover, Caesars' recent acquisition of sports betting specialist William Hill should give it an edge in the rapid growth of online gambling activity.
Betting on an economic recovery in 2021 might seem like a sure thing, but Caesars' stock is already up sevenfold in just over a year. As the company continues to reorganize itself as part of a longer-term restructuring, Caesars will need support from public visitors to keep its momentum.