Activision Blizzard Shares Slip on Weaker Guidance

Activision Blizzard (NASDAQ: ATVI) reported its second quarter financial results during extended trading hours on Thursday. The gaming company topped analysts’ expectations for both revenue and earnings, however provided a weaker guidance, which sent shares tumbling by 3%.

For the second quarter, Activision Blizzard reported earnings of USD 0.53 per share on revenue of USD 1.40 Billion. Analysts expected earnings of USD 0.35 per share on revenue of USD 1.32 Billion. 

Activision reported that its revenue and earnings had fallen year-over-year. Revenues fell compared to USD 1.64 Billion in the second quarter of fiscal 2018, while earnings slipped from 0.62 per share last year. The declining revenue was attributable to the decrease in product sales and subscription, licensing, and other revenues.

Activision reported produce sales of USD 359 Million compared to USD 464 Million a year ago. The Company also reported subscription, licensing, and other revenues of USD 1.03 Billion versus USD 1.17 Billion the same quarter a year prior.

Additionally, Activision’s net bookings fell from USD 1.38 Billion last year to USD 1.21 Billion in the second quarter. 

Activision Blizzard reported 327 million monthly active users (MAUs) during the quarter, primarily stemming from its King unit. King reported 258 MAUs, predominantly driven by its Candy Crush franchise. 

Activision reported 37 million MAUs, driven by its Call of Duty: Black Ops 4 and Call of Duty: WWII growth. Meanwhile, Blizzard reported 32 million MAUs as the unit witnessed user growth in Hearthstone. Overwatch MAUs remained stable quarter-over-quarter. 

Compared to the first quarter, Activision Blizzard witnessed a decline in its MAUs in just a 3-month period. In the first quarter, Activision had 41 million MAUs, while Blizzard had 32 million MAUs. King had 272 million MAUs. 

For the third quarter, Activision Blizzard is expecting earnings of USD 0.20 per share on revenues of USD 1.11 Billion, which is well below analysts’ estimates of USD 1.36 Billion.

As for the full year, Activision Blizzard forecasts earnings of USD 2.02 per share on revenue of USD 6.19 Billion.

2 Comments
  1. Kirk Lewis 1 week ago
    Reply

    This is ridiculous…$WMT removing displays of violent video games from stores, but still selling guns. In case it’s not obvious, these same games are sold widely in Europe and Canada without provoking violence. Don’t scapegoat games. $TTWO $ATVI $EA

  2. Richard Dvorak 1 week ago
    Reply

    After their latest earnings, would you consider ActivisionBlizzard $ATVI a #WinterBear?

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