Activision Blizzard, Inc. (ATVI) intends to release its third quarter 2013 results after the close of the market on Wednesday, November 6, 2013. In conjunction with this release, Activision Blizzard will host a conference call that will be broadcast over the Internet.
Wall Street anticipates that the multimedia & graphics software will make a profit of $0.3 per share for the quarter. iStock expects ATVI to top Wall Street's consensus number. The iEstimate is $0.04.
Activision Blizzard publishes online, personal computer (PC), console, handheld, and mobile interactive entertainment products worldwide i.e. video games. It operates in three segments: Activision, Blizzard, and Distribution.
The NASDAQ 100 member has had no problems bypassing Wall Street's consensus estimate. Activision delivered bullish earnings surprises in 13 of the last 16 quarters. On average, the maker of Call of Duty (more on that below) beats the street by 124.14%.
Only once has ATVI disappointed when the profit report-card was due, missing by $0.03. That leaves two bull's-eye results.
Despite exceeding expectation by as much as 500%, Activision Blizzard's earnings driven stock price-performance has been underwhelming. Shares fell by an average of 4.97% in the days surrounding nine of the last 16 quarterly checkups. The stock backpedaled from -2.20% to -7.90%.
On B-side, ATVI gained an average 6.53% when EPS and guidance were warmly greeted by investors for the lucky seven remaining occasions.
Although earnings will be big news on Wednesday, guidance and early returns on the video game Call of Duty Ghosts will probably weigh more heavily on Activision Blizzard's performance.
So, let's go to Google Trends. First up, Call of Duty Ghosts is the #1 trending search today. Based on peak search volume intensity for previous Call of Duty releases, Ghosts will like be the most or second most successful release. Without the benefit of today's data, "Call of Duty Ghosts" ranks second among! the last five Call of Duty scores. If the current trajectory continues, Ghosts should take the top spot by the end of the week.
According to Wikipedia, "Call of Duty: Black Ops II day-one shipments were the largest for any game ever." In the first 24hours, Activision reported U.S. sales for Black Ops II in excess of 7.5 million, grossing more than $500 million. It was the fourth consecutive record-setting year that the Call of Duty broke its own record!
Investors will look for an update during Wednesday afternoon's conference call.
In addition to the apparent success of Call of Duty Ghosts, Activision has had success moving more of its revenue to a subscription and licensing (S&L) model. Last quarter, S&L accounted for 30.76% of revenue versus 25.76% in the prior year.
The transition means lower costs of operation and higher profit margins. Year-over-year, Q2 total costs and expenses fell to 59.05% from 78.89% of sales. That's the sort of stuff that makes for large earnings surprises.
Overall: If Call of Duty Ghosts sets a fifth consecutive sales record as Google Trends suggest, and the iEstimate is correct, which is probably secondary, then Activision Blizzard, Inc. (ATVI) has a legitimate chance to be on the good side of the tape Thursday morning.
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