Activision Blizzard (
is set to report first quarter 2013 results on May 8. Activision
reported fourth quarter earnings of 75 cents, which surpassed the
Zacks Consensus Estimate by 6 cents. Let's see how things are
shaping up for this announcement.
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Growth Factors this Past Quarter
A strong jump in top-line growth based on solid performance from
the Call of Duty and Skylanders franchises were the main forces
behind the comfortable beat. Additionally, operating expenses
declined in the quarter that pushed up operating margin by 760
basis points ("bps").
Activision plans to launch a number of games based on its four
franchises - Call of Duty, Skylanders, World of Warcraft and
StarCraft. However, Activision remains cautious on fiscal 2013
due to volatile macroeconomic environment coupled with
uncertainly related to console transition and tough
The Zacks Consensus Estimate for the first quarter stands at 9
cents while that for fiscal 2013 stands at 76 cents.
Activision posted positive surprises in the last four quarters
with an average surprise of 110.94%.There were no estimate
revisions for both the first quarter and fiscal 2013 over the
past 30 days. As a result, the Zacks Consensus Estimate for both
periods has remained unchanged.
The chances of a big surprise are unlikely given the lack of
catalysts during the quarter. The stock carries a Zacks Rank #3
We caution against stocks with Zacks Ranks #4 and #5 (Sell rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Our model states that a stock needs to have both a positive Zacks
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, #2 or #3 to beat earnings estimates. You
could, therefore, consider stocks like:
Hasbro Inc (
, Earnings ESP of +3.03% and Zacks Rank #2 (Buy)
International Game Technology (
, Earning ESP of +3.23% and Zacks Rank #2 (Buy)
Webcom Group Inc (
, Earnings ESP of +2.38% and Zacks Rank #2 (Buy)