Activision Blizzard, Inc. ($ATVI) Earnings (Q1 FY22)

Activision Blizzard, Inc. ($ATVI) Earnings and Opinion:


Activision Blizzard is a company in the Communication Services sector and operates in the Electronic Gaming and Multimedia industry. The company develops and publishes interactive entertainment content and services worldwide. Activision Blizzard was founded in 1979 and is currently headquartered in Santa Monica, California. They were first traded on the public stock market in 1993.  

Activision Blizzard EPS and Revenue (Q1 FY22):

  • EPS of $0.64 missing expectations of $0.73
  • Revenue of $1.77B missing expectations of $1.8B
Activision Blizzard Q1 Highlights:
  • Revenue down 22.2% (YOY)
  • EPS down 34.7% (YOY)
  • Operating cash flow of $642M 
Opinion:
Activision Blizzard traded a tiny bit lower during todays trading session after reporting earnings before the market opened this morning. Activision had a bad quarter after missing expectations on both EPS and revenue. The main blame for most of this came from the fact that the demand of Call of Duty (one of the more popular games the company produces) was decreasing. This caused revenues to come in down 22% and EPS to come in down 34.7% (on a year-over-year basis). They also saw cash flow decline and only brought in $642M in operating cash flow. I'm surprised the stock didn't decline further than it did due to the fact that they reported pretty bad earnings. They currently have an acquisition deal going on with Microsoft, in which Microsoft will acquire the company for around $68.7B or $95 a share in cash. This is still being reviewed, but I think it could bring a benefit to both companies. It will be interesting to see how it all ends up playing out, but we will have to wait about 3 more quarters until the result will be revealed. Personally, I do not have a big interest in this company while it operates independently. They make some solid games and are one of the better respected companies in this industry. I just don't see a sense of buying it until the Microsoft transaction goes through and then we will get a sense what they company may do with it. I could see some solid success with this company as a subsidiary of Microsoft. That is going to be my make or break on the company, but for now I would just stay out of it and invest elsewhere. 

*Information from Activision Blizzard, Yahoo Finance, and Nasdaq
*Estimates from Zacks

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