Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Activision Blizzard, Inc. (ATVI): What Happened?

Activision Blizzard, Inc. (NASDAQ:ATVI) reported a fairly strong quarter driven by the release of some blockbuster video gaming titles like StarCraft 2: Heart of the Swarm, Diablo 3, and Call of Duty Black Ops 2. The company’s release schedule in the first quarter led to the strong surge in revenue and net income.

Activision Blizzard, Inc. (NASDAQ:ATVI)

Earnings highlights

The company reported earnings per share of $0.40 for the first quarter beating its prior outlook of $0.29. The company beat its outlook by a staggering 37.9%. The company grew its earnings per share figure from $0.33 in 2012 to $0.40 per share in 2013.

Investors have bid up the stock by 36.68% since the beginning of 2013. The company’s strong performance was driven by the release of 3 blockbuster titles. Subscription and licensing also contributed to the strong performance. The revenue from subscription and licensing grew from $298 million in the first quarter of 2012 to $334 million in the first quarter of 2013. The company grew its revenue year-over-year from $1.172 billion to $1.324 billion in the first quarter of 2013.

The company isn’t that optimistic on its future, which can be seen by the analyst community who anticipate the company to report a decline in earnings for the full fiscal year. The company’s earnings are expected to decline by 28% for the full-year. The reason for the decline in earnings is driven by the transition from PlayStation 3 and Xbox 360 to the next generation consoles.


Activision Blizzard, Inc. (NASDAQ:ATVI) anticipates revenue of $4.220 billion with EPS guidance at $0.73 for the full-year. The decline in earnings is driven by a sudden increase in operating expenses. The company’s operating expenses are expected to increase from 40% to 49%. The operating expenses are expected to increase in anticipation of the console refresh cycle (development costs are likely to rise due to the console refresh cycle).

Hardcore gaming isn’t very compatible with mobile devices, and with mobile devices expected to take up a larger amount of our attention span it is becoming increasingly difficult for the hard-core gaming community to stack up against casual gaming. Sony Corporation (ADR) (NYSE:SNE) hopes to bridge the divide from mobile devices through the use of the cloud. Sony Corporation (ADR) (NYSE:SNE) hopes to enable video gaming on any and all mobile devices using the internet, which will allow mobile devices to access the hardware of the PlayStation 4 remotely. The remote access capabilities of mobile devices to a PlayStation 4 will allow consumers to access PlayStation content on the go.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.