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Activision Blizzard, Inc. (ATVI) Information Technology - Software| Reports February 11, After Market Closes

Key Takeaways

• The Estimize consensus is calling for EPS of $0.89 and revenue of $2.22 billion, slightly higher than corporate guidance and Wall Street
• In November 2015, Activision announced its acquisition of King Digital
• This quarter the Activision is leaning on its already established franchises and the debut of the newest Call of Duty game to boost bottom line growth.
• What are you expecting for ATVI? Get your estimate in here!

Popular video game publisher, Activision Blizzard, is scheduled to report fourth quarter earnings February 11, after the markets close. Activision is coming off a third quarter which delivered a positive earnings surprise of over 38%. Despite a string of high growth quarters, shares of Activision continue to fall with no obvious explanation. In Q4, the company carried out strategic initiatives to build on its digital platform, including acquiring King Digital and introducing a new line of games featured on Apple TV. These efforts are expected to boost the bottom-line which would typically help the stock, but in this volatile environment there is no guarantee that will happen. The Estimize consensus is calling for EPS of $0.89, two cents above Wall Street, and revenue expectations of $2.22 billion are only $20 million ahead of the Street. Compared to the same period last year, this represents a projected decline on the bottom-line of, 4% . 

Activision’s focus on broadening its deep portfolio of games including World of Warcraft and Call of Duty has been largely beneficial. The company is leaning on the launch of Call of Duty: Black Ops III over the holidays to drive bottom line growth for the quarter. So far, Activision has seen positive results with a growing active user base and engagement. Outside of console games, the company is expanding its footprint in digital platforms. In November 2015, Activision announced the acquisition of the maker of Candy Crush, King Digital. Currently, King Digital attracts over 500 million monthly active users, which ATVI hopes to leverage in the rapidly growing mobile gaming space. Moreover, the company recently debuted Guitar Hero on Apple TV which the company is hoping will drive digital growth. By exploiting new distribution channels and reducing its dependence on traditional gaming platforms, Activision has created multiple revenue generating alleys to drive long term growth.