Activision Blizzard Forward Guidance Lags Forecasts After Posting Market-Beating Second-Quarter Results

Activision Blizzard, Inc (ATVI), a video game and film holding company, reported second-quarter results that beat its own and the market’s forecasts as lower total costs helped mitigate the impact of a decline in sales, but its guidance for the full-year failed to meet analysts’ expectations.

Sales at the Santa Monica, California-based group fell to $1.40 billion during the three months that ended June 30, from $1.64 billion a year earlier, but were still above the $1.19 billion average analyst estimate compiled by Capital IQ. Group turnover declined as net bookings, in particular from digital channels, slumped.

Although adjusted earnings of $0.53 per share were also lower than the $0.62 per share reported a year earlier, they were also higher than the $0.26 forecast as lower costs and expenses in the second quarter helped mitigate the impact of a decline in sales.

Looking ahead to the third quarter, the company expects sales of $1.11 billion, which is below the Street view of $1.28 billion. The adjusted earnings per share outlook at $0.20 also lags the $0.39 consensus. For the full-year 2019, the firm anticipates adjusted earnings per share of $2.02 on revenue of $6.19 billion, both missing forecasts for $2.20 and $6.35 billion, respectively.

The company said net bookings, which dropped to $1.21 billion in the second quarter from $1.38 billion a year ago, were expected to come in at $1.10 billion in the third quarter, bringing the annual figure to $6.30 billion for the full-year 2019.

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