Tags: Activision | Blizzard | gaming | ATVI

Activision Blizzard Rides Gaming Wave

By    |   Tuesday, 27 Dec 2011 07:30 PM

You can tell video games are a big-time business when news hits the wire that an Activision Blizzard (ATVI) game racked up $1 billion in sales in less than three weeks. The video game company is currently riding a wave of electronic gaming growth with a stable of hot titles.

Activision Blizzard develops and publishes games for computers, gaming consoles, handheld devices and online access. Activision publishes the Call of Duty game series and games based on popular characters such as X-Men and Transformers. Blizzard Entertainment is known for the World of Warcraft and Starcraft game franchises.

For the first three quarters of 2011, the company generated about two-thirds of revenues through product sales and the remaining third came from digital subscription sales.

Activision Blizzard publishes both a set of GAAP and non-GAAP financial results. Financial analysts follow the non-GAAP numbers and a potential investor is advised to do the same.

For the first nine months of 2011, the company reported non-GAAP revenue of $2.08 billion, down from $2.25 billion a year earlier. Net income for the period was 31 cents per share, compared to 27 cents in the first three quarters of 2010.

The third quarter earnings report noted that for the first nine months of 2011 the company realized record operating margin and earnings per share for the year-to-date period.

Big fourth quarter

Activision Blizzard generates half of its annual revenue and more than half of net earnings in the holiday fourth quarter. Company guidance predicts non-GAAP revenue of $2.17 billion for the 2011 fourth quarter and net income of 55 cents per share, bringing the 2011 net to 85 cents per share, compared to earnings of 79 cents in 2010.

However, that revenue and earnings forecast was issued before the newly released Call of Duty Modern Warfare racked up $1 billion in sales in 16 days starting in late November.

Actual reported earnings also demolished the Wall Street consensus estimate for each of the first three quarters of 2011. Recent analyst actions on ATVI include an initiation of coverage by Robert W. Baird analysts with a buy rating. The analysts at Lazard Capital downgraded the stock to neutral from buy.

The company next reports on Feb. 7.

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You can tell video games are a big-time business when news hits the wire that an Activision Blizzard (ATVI) game racked up $1 billion in sales in less than three weeks. The video game company is currently riding a wave of electronic gaming growth with a stable of hot...
Activision,Blizzard,gaming,ATVI
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2011-30-27
Tuesday, 27 Dec 2011 07:30 PM
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