Activision Blizzard Inc.
) is scheduled to release its fiscal first quarter 2012 results
after market closes on Wednesday, May 9, 2012. In the run up to the
earnings release, we do not notice any changes in the analyst
estimates for the quarter. Activision has outperformed the
Zacks Consensus Estimate by an astounding 191.4% over the last four
quarters and we expect yet another earnings beat from the
Prior Quarter Highlights
Activision's fourth quarter results surpassed the Zacks
Consensus Estimate on both top and bottom lines. Activision's
earnings came in at 59 cents per share (including stock based
compensation but excluding one time items), ahead of the Zacks
Consensus Estimate of 55 cents.
Though non-GAAP revenues (excluding revenues from deferral and
related cost of sales) shrank 5.5% year over year to $2.41 billion,
it easily surpassed the Zacks Consensus Estimate of $2.20 billion.
Despite the year-over-year decline, Activision's revenue beat was
primarily attributed to its digital revenue streams and online
presence of popular titles such as
World of Warcraft
Call of Duty
For further details please read:
Activision Tops Estimates
Current Quarter Expectations
For the first quarter of 2012, Activision expects non-GAAP EPS
(excluding stock based compensation and other one time items) of 3
cents on revenues of $525 million. The Zacks Consensus Estimate
projects earnings of 1 cent per share on revenues of $551.0 million
for the quarter.
For fiscal 2012, Activision's non-GAAP EPS (excluding stock
based compensation and other one time items) estimate is 94 cents,
above the Zacks Consensus Estimate of 88 cents. Total revenue
(non-GAAP) is estimated to be $4.50 billion, below the Zacks
Consensus Estimate of $4.56 billion.
Estimates Trend Revision
Over the past 30 days, none of the four analysts covering the
stock revised the estimates. The Zacks Consensus Estimate for the
first quarter of 2012 also did not move, remaining at 1 cent.
For fiscal 2012, only one out of the 4 analysts covering the
stock made a negative revision, while no upward revision was
noticed over the last 30 days. The Zacks Consensus Estimate for
fiscal 2012 decreased by a cent to 88 cents over the same
Analysts covering the stock are cautiously optimistic about
Activision due to the continuous decline in sales in the video game
industry over the last few months. Moreover, lower than expected
Call of Duty
DLC sales and continuous loss of subscribers related to
World of Warcraft
are the other factors that may limit the growth of the company.
However, Activision's foray into the mobile gaming market is
expected to be a long-term positive catalyst.
Despite these factors, analysts are optimistic about decent
fiscal 2012 results based on Activision's release of
, the squeal of
. Moreover, the releases of
Call of Duty Black Ops 2
will provide the necessary boost to the company's guided top-line
and bottom-line figures.
We expect that the company's continued initiatives to expand in
the digital online business segment will pay rich dividends in the
near term. A healthy product pipeline for 2012 will also boost
Activision's top-line growth in the long term.
However, the softness in the video game industry and
Activision's limited presence in the social gaming market coupled
with significant competition from
Electronic Arts Inc.
Take-Two Interactive Software Inc.
) keep us Neutral on the stock over the long term.
Currently, Activision Blizzard has a Zacks #3 Rank, which
implies a 'Hold' rating in the short term.
ACTIVISION BLZD (ATVI): Free Stock Analysis
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