The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Activision Blizzard beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share grew significantly.
Margins grew across the board.
Activision Blizzard reported revenue of $751.0 million. The 21 analysts polled by S&P Capital IQ predicted a top line of $710.2 million on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $754.0 million.
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 $0.15. The 23 earnings estimates compiled by S&P Capital IQ averaged $0.08 per share. GAAP EPS of $0.20 for Q3 were 54% higher than the prior-year quarter's $0.13 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 72.5%, 390 basis points better than the prior-year quarter. Operating margin was 27.0%, 510 basis points better than the prior-year quarter. Net margin was 26.9%, 730 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $2.34 billion. On the bottom line, the average EPS estimate is $0.67.
Next year's average estimate for revenue is $4.68 billion. The average EPS estimate is $1.01.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,966 members out of 7,193 rating the stock outperform, and 227 members rating it underperform. Among 1,399 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,362 give Activision Blizzard a green thumbs-up, and 37 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 $15.67.
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