The 10-second takeaway
For the quarter ended June 30 (Q2), Activision Blizzard crushed expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share shrank significantly.
Margins dropped across the board.
Activision Blizzard booked revenue of $1.05 billion. The 20 analysts polled by S&P Capital IQ hoped for a top line of $837.9 million on the same basis. GAAP reported sales were 6.2% lower than the prior-year quarter's $1.15 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 $0.20. The 22 earnings estimates compiled by S&P Capital IQ predicted $0.12 per share. GAAP EPS of $0.16 for Q2 were 45% lower than the prior-year quarter's $0.29 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 65.6%, 450 basis points worse than the prior-year quarter. Operating margin was 21.1%, 1,990 basis points worse than the prior-year quarter. Net margin was 17.2%, 1,200 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $735.0 million. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $4.60 billion. The average EPS estimate is $0.96.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,987 members out of 7,206 rating the stock outperform, and 219 members rating it underperform. Among 1,366 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,324 give Activision Blizzard a green thumbs-up, and 42 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 $15.68.
New technology paradigms and mobile devices are driving the next wave of computing. Many older companies won't survive the change, while fortunes will be made by the first movers in the field. Where does Activision Blizzard fit in? What's the fortune-making change? Check out "The 2 Words Bill Gates Doesn't Want You to Hear..." Click here for instant access to this free report.
- Add Activision Blizzard to My Watchlist.