Activision Blizzard Inc. (
is set to report first-quarter 2014 results on May 6. Last
quarter, the company posted an 8.6% positive surprise. The
company has posted an average positive earnings surprise of
225.1% over the past four quarters. Year-to-date, Activision's
share price has increased 10.4% compared with 2.7% in the S&P
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Let's see how things are shaping up for the first quarter:
Growth Factors this Past Quarter
Activision's first-quarter results are expected to be driven by
Hearthstone: Heroes of Warcraft,
which was launched on
PCs during the quarter. Strong console sales from Microsoft and
is expected to boost Activision's gaming pipeline. Robust
Call of Duty: Ghosts
are also expected to boost the top line in the quarter.
For the first quarter, Activision expects non-GAAP revenues of
$675.0 million. This is slightly lower than the Zacks Consensus
Estimate of $689.0 million. Earnings are expected to be 9 cents
per share as against the Zacks Consensus Estimate which is pegged
at 7 cents per share.
Our proven model does not conclusively show that Activision is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
: Earnings ESP for Activision stands at 0.00%. This is because
both the Most Accurate estimate and the Zacks Consensus Estimate
are pegged at 7 cents.
: Activision has a Zacks Rank #3 (Hold) which when combined with
0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions.