Activision Blizzard


ATVI

is set to report first-quarter 2022 results on Apr 25.

The Zacks Consensus Estimate for revenues is pegged at $1.80 billion, indicating a decline of 12.86% from the year-ago quarter’s reported figure.

The consensus mark for first-quarter earnings has remained unchanged at 73 cents per share in the past 30 days.

The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed the same in one. Activision has a trailing four-quarter earnings surprise of 9.76%, on average.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Activision is expected to have benefited from the popularity of its franchises, including

Call of Duty (COD), Overwatch, Hearthstone, World of Warcraft, Candy Crush Saga

and

Candy Crush Friends Saga

, in the to-be-reported quarter.

The expanding user bases of

COD, Hearthstone, World of Warcraft

and King’s franchises are expected to have boosted in-game spending, driving net bookings and the top line in the to-be-reported quarter.

Activision expects net bookings of $1.811 billion for the first quarter of 2022.

Steady video game spending in the quarter is expected to have benefited Activision. Per VentureBeat, which cited NPD data, consumer spending on video games was down 2% and 6% year over year in January and February, respectively.

In the last reported quarter, several major game releases like

Fractured in Alterac Valley, Hearthstone Mercenaries

and

Call of Duty: Vanguard

are expected to have increased active user growth in the to-be-reported quarter. This is expected to boost the top-line growth. These last quarter releases are expected to have had a positive impact on the user engagement in the first quarter of 2022.

Intensifying competition from game publishers like

Tencent


TCEHY

,

Roblox


RBLX

and

NetEase


NTES

is expected to have hurt Activision’s top line in the first quarter.

Tencent’s

Honor of Kings

and

PUBG Mobile

and Roblox’s

Roblox

were the first, second and fifth top-grossing games, respectively, in terms of overall revenues in January,

per Sensor Tower data

. In terms of app store revenues, Tencent’s

Honor of Kings

and

PUBG Mobile

held the first and second spots, while Roblox’s

Roblox

held the fourth position in the top-grossing games list. NetEase’s

Fantasy Westward Journey

and Activision-subsidiary King’s

Candy Crush Saga

held the sixth and seventh top-grossing mobile games in January.

Key Q1 Development

On Jan 18,

Microsoft


MSFT

announced plans to acquire Activision Blizzard.

Microsoft will pay $95.00 per Activision share, with the total transaction value being $68.7 billion. The deal is expected to close in the fiscal year 2023.

Zacks Rank

Activision has a Zacks Rank #3 (Hold) currently.

ATVI is up 18.6% in the past year compared with the Zacks

Toys – Games – Hobbies

industry’s return of 1.3% and against the

Consumer Discretionary

sector’s fall of 14.4% in the year-to-date period.

You can


see the complete list of Zacks #1 Rank stocks here


.

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