The 10-second takeaway
For the quarter ended March 31 (Q1), Activision Blizzard beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share shrank significantly.
Gross margins grew, operating margins dropped, net margins dropped.
Activision Blizzard reported revenue of $587.0 million. The 19 analysts polled by S&P Capital IQ looked for revenue of $556.6 million on the same basis. GAAP reported sales were 19% lower than the prior-year quarter's $1.45 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.06. The 21 earnings estimates compiled by S&P Capital IQ forecast $0.04 per share. GAAP EPS of $0.33 for Q1 were 21% lower than the prior-year quarter's $0.42 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 69.8%, 110 basis points better than the prior-year quarter. Operating margin was 43.8%, 400 basis points worse than the prior-year quarter. Net margin was 32.8%, 190 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $824.5 million. On the bottom line, the average EPS estimate is $0.15.
Next year's average estimate for revenue is $4.59 billion. The average EPS estimate is $0.98.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,963 members out of 7,177 rating the stock outperform, and 216 members rating it underperform. Among 1,485 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,445 give Activision Blizzard a green thumbs-up, and 40 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Activision Blizzard is outperform, with an average price target of $15.87.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Fool owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Activision Blizzard. Motley Fool newsletter services have recommended creating a synthetic long position in Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.