Earnings Outlook for Activision Blizzard
On Thursday, February 04, Activision Blizzard (NASDAQ:ATVI) will release its latest earnings report. Decipher the announcement with Benzinga's help.
What Are Earnings, Net Income, And Earnings Per Share?
Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.
Earnings And Revenue
Analysts expect Activision Blizzard earnings of $1.17 per share. Revenue will likely be around $2.83 billion, according to the consensus estimate. In the same quarter last year, Activision Blizzard reported EPS of $1.23 on revenue of $2.71 billion.
Why Analyst Estimates And Earnings Surprises Are Important
Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.
The analyst consensus estimate would represent a 4.88% decrease in the company's earnings. Revenue would be up 4.51% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:
EPS Estimate | 0.65 | 0.68 | 0.38 | 1.19 |
EPS Actual | 0.71 | 0.97 | 0.58 | 1.23 |
Revenue Estimate | 1.69 B | 1.70 B | 1.32 B | 2.68 B |
Revenue Actual | 1.77 B | 2.08 B | 1.52 B | 2.71 B |
Stock Performance
For a full 12 months, the return has risen by 55.21%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.
Do not be surprised to see the stock move on comments made during its conference call. Activision Blizzard is scheduled to hold the call at 16:30:00 ET and can be accessed here.
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