The 10-second takeaway
For the quarter ended March 31 (Q1), Activision Blizzard crushed expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share expanded significantly.
Gross margins dropped, operating margins increased, net margins grew.
Activision Blizzard tallied revenue of $1.32 billion. The 22 analysts polled by S&P Capital IQ foresaw revenue of $704.9 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $1.17 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 $0.17. The 22 earnings estimates compiled by S&P Capital IQ predicted $0.11 per share. Non-GAAP EPS of $0.17 for Q1 were 183% higher than the prior-year quarter's $0.06 per share. GAAP EPS of $0.40 for Q1 were 18% higher than the prior-year quarter's $0.34 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 68.6%, 120 basis points worse than the prior-year quarter. Operating margin was 44.3%, 50 basis points better than the prior-year quarter. Net margin was 34.4%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $608.1 million. On the bottom line, the average EPS estimate is $0.05.
Next year's average estimate for revenue is $4.29 billion. The average EPS estimate is $0.85.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,899 members out of 7,126 rating the stock outperform, and 227 members rating it underperform. Among 1,505 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,472 give Activision Blizzard a green thumbs-up, and 33 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Activision Blizzard is buy, with an average price target of $15.76.
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