Activision Blizzard, Inc. ATVI continued to surprise investors on Friday morning, trading down 3 percent after posting an unexpected second-quarter earnings beat on Thursday.
The video game maker reported EPS of 43 cents and $1.42 billion in sales compared to the 30-cent and $1.22 billion consensus estimates. Management also raised its fiscal 2017 guidance.
‘No New Products, No Problem’
The beat was a surprise since Activision hasn’t put out a new game recently. Credit Suisse analyst Stephen Ju said bookings growth was “incidentally reaccelerated” by microtransactions from “Overwatch,” “Call of Duty” and “Candy Crush.”
Ju reiterated an Outperform rating on the stock and raised his price target from $67 to $74. Ju also set an end-of-2018 target at $80.
“We note that the nature of the outperformance should be sustained into following quarters/years,” said Ju in a note. “Moreover these revenue streams arrive at high incremental margins.”
Those margins are expected to expand as products with finite production costs continue to earn revenue.
Ju now expects fiscal 2017 EPS to be $2.20 versus the company’s $2.08 guidance, and total sales of $7.1 billion, about $500 million above guidance.
Keep up with earnings season and analyst coverage in real-time with Benzinga Pro.
Related Links:
Activision Blizzard Posts Q2 Earnings Beat
Activision Blizzard Reports Q2 Earnings As E-Sports Continue To Grow
Image credit: Fun Oh, Flickr
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
