Activision Blizzard


ATVI

is set to report fourth-quarter 2020 results on Feb 4.

For the to-be-reported quarter, the company expects non-GAAP revenues of $2 billion and earnings of 63 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $2.82 billion, indicating an increase of 4.3% from the year-ago quarter’s reported figure.

Moreover, the consensus mark for fourth-quarter earnings has stayed at $1.18 per share in the past 30 days. The projected figure suggests a decline of 4.1% from the year-ago quarter’s reported figure.

Notably, the company’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 26.2%.

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

Factors to Consider

Activision’s popular franchises, including

Call of Duty

(COD),

Overwatch

,

Hearthstone

,

World of Warcraft

,

Candy Crush Saga

and

Candy Crush Friends Saga

are expected to have attracted coronavirus-induced home-confined gamers in the to-be-reported quarter.

Activision’s top line is expected to benefit from an expanding user base of COD,

Hearthstone

,

World of Warcraft

and King’s franchises. This is expected to boost in-games spending, thereby driving net bookings and the top line of this Zacks Rank #3 (Hold) company. You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

.

Activision expects net bookings of $2.73 billion for the fourth quarter.

In Dec 2020, Activision revealed that the COD franchise’s net bookings have surpassed $3 billion over the past year.

Call of Duty: Mobile

, developed in collaboration with

Tencent


TCEHY

, has played an important part in driving user base. Markedly, since its launch in October 2019, the title has been the highest-grossing new game in app stores in the United States and has generated over $480 million in player spending during its first year.

Further, Blizzard Entertainment’s

World of Warcraft: Shadowlands

become the fastest-selling PC game. In mid-November, Activision announced the availability of

Call of Duty: Black Ops Cold War

, a sequel to the original

Call of Duty: Black Ops game

.

Moreover, strong video game spending in the quarter bodes well for Activision. Per Venturebeat, which cited NPD data, the U.S. video game sales in

October

,

November

and

December

increased 14%, 35% and 25%, respectively.

However, Activision faces stiffcompetition from the likes of

Take Two Interactive Software


TTWO

, Nintendo and

Electronic Arts


EA

apart from Tencent and Epic Games.

Nevertheless, Activision’s strong portfolio of games is expected to have boosted monthly active user base in the to-be-reported quarter.

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