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Tuesday, February 12, 2019

=Activision Blizzard (ATVI) reported earnings on Tue 12 Feb 2019 (a/h)

Activision Blizzard beats by $0.31, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY19 EPS in-line, revs below consensus
  • Reports Q4 (Dec) earnings of $0.84 per share, $0.31 better than the S&P Capital IQ Consensus of $0.53; net bookings rose 7.6% year/year to $2.84 bln vs the $3.04 bln S&P Capital IQ Consensus. 
    • For the quarter ended December 31, 2018, Activision Blizzard's net bookings were a record $2.84 billion, compared with $2.64 billion for the fourth quarter of 2017, below prior outlook. Net bookings from digital channels were a record $1.88 billion, as compared with $1.62 billion for the fourth quarter of 2017, and in-game net bookingswere a record of $1.2 billion.
  • Co issues downside guidance for Q1, sees EPS of $0.39 vs. $0.73 S&P Capital IQ Consensus; sees Q1 net bookings of $1.18 bln vs. $1.48 bln S&P Capital IQ Consensus.
  • Co issues downside guidance for FY19, sees EPS of $1.18 vs. $2.13 S&P Capital IQ Consensus; sees FY19 net bookings of $6.3 bln vs. $7.3 bln S&P Capital IQ Consensus.
  • "The number of developers working on Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone and Diablo in aggregate will increase approximately 20% over the course of 2019. The company will fund this greater investment by de-prioritizing initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business. The company is also integrating its global and regional sales and go-to-market, partnerships, and sponsorships capabilities. As part of these restructuring actions, the company expects to incur a GAAP-only pre-tax charge of approximately $150 million, the majority of which is expected to be incurred this year."
  • Board increases quarterly dividend to $0.37/share from $0.34/share.
  • Additionally, the Board of Directors authorized a new two-year stock repurchase program under which the company is authorized to repurchase up to $1.5 billion of its outstanding common stock during the period.
Activision's results follow weak reports from other rival publishers such as Take-Two Interactive Software Inc and Electronic Arts Inc, adding to fears that competition from free-to-play battle royale games "Fortnite" and "PUBG" was eating into sales.

Even as jettisons workers as some of its revenue evaporates, Activision said it will also boost its stockholder dividend by 9 percent from last year to 37 cents per share.

Activision to lay off 800 workers as video game sales drop
SANTA MONICA, Calif. (AP) — Video game maker Activision Blizzard is laying off nearly 800 workers as the company braces for a steep downturn in revenue following the best year in its history.

The cutbacks announced Tuesday illustrate the boom-and-bust cycles in an industry whose fortunes are tied to video games that can have a relatively short lives before players move on to the next craze.

Right now, Epic Games' "Fortnite" is a hot fad that has been siphoning attention — and potential sales — from the titles made by other companies.

Although Activision also still owns popular games such as "Call of Duty" and "Candy Crush," it expects its revenue this year to fall by about 20 percent to $6.03 billion.

Activision will cope trimming 8 percent from its workforce of nearly 10,000 people and assigning more of its remaining employees to work on "Call of Duty," ''Candy Crush," and several other of its most popular titles.

The Santa Monica, California, company had already reshuffled its leadership, even though it profits rose last year by more than five-fold to $1.8 billion. Revenue climbed 7 percent to $7.5 billion, the highest since Activision's inception 40 years ago.

At the same time, Activision Blizzard (NASDAQ: ATVI) will increase the number of developers on key franchises by 20 percent, including “Call of Duty” “CandyCrush,” “Overwatch,” “Warcraft,” “Hearthstone” and “Diablo.”

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