Activision Blizzard Posts 2nd-Quarter Numbers
Shares of Activision Blizzard Inc. (NASDAQ:ATVI) moved 1.78% lower to $48.46 in after-hours trading Thursday, even though the company beat consensus estimates on second-quarter earnings per share by 21 cents.
Earnings per share were 43 cents, or nearly 19% lower compared to the prior-year quarter.
Net revenues declined 15% to approximately $1.4 billion.
The last few earnings reports didn't thrill investors as the U.S. electronic gaming and multimedia company showed declines instead of growth in key metrics such as audience size, bookings, engagement and monetization.
The second-quarter results served investors fresh year-over-year declines in key metrics.
Total audience size: total number of monthly active users of Activision Blizzard declined 7.1% to 327 million.
Audience size by segment:
Activision's MAUs fell 17.8% to 37 million. Through the Activision segment, the company develops, distributes and publishes interactive entertainment for several devices.
Blizzard Entertainment's MAUs decreased 13.5% to 32 million. Through the Blizzard Entertainment segment, the company develops, distributes and publishes gaming content for several devices.
King Digital Entertainment's MAUs fell 4.4% to 258 million. Through the King Digital Entertainment segment, the company creates leading interactive entertainment exclusively for mobiles.
Bookings: Net bookings fell 12.3% to $1.21 billion, but beat expectations by $20 million.
Engagement: The company reported strong growth in total time spent by users in King's Candy Crush franchise and Activision's Call of Duty franchise.
Moreover, second-quarter operating cash flow was $154 million, versus $9 million. Trailing 12-month operating cash flow of $1.86 billion was still 11% lower than $2.08 billion a year ago.
"Our second quarter results exceeded our prior outlook for both revenue and earnings per share," CEO Bobby Kotick said. "In the first half of 2019 we have prioritized investments in our key franchises and, beginning in the second half of this year our audiences will have a chance to see and experience the initial results of these efforts."
Looking ahead, the company guided for earnings per share of 5 cents for the third quarter and of $1.41 for full 2019. Also, the company forecasted bookings of $1.1 billion for the third quarter and of $6.3 billion for full 2019.
The balance sheet had nearly $4.6 billion in cash and equivalents and approximately $2.7 billion in debt as of June 30, 2019.
Activision Blizzard Inc. paid 37 cents cash in annual dividend per common share on May 9 for a dividend forward yield of 0.77% versus the industry median of 1.66%, based on Thursday's closing price.
The stock has gained 6% so far this year, and it closed at $49.33 per share on Thursday. The market capitalization is $37.79 billion.
The 52-week range is $39.85 to $84.68.
Wall Street issued an overweight recommendation rating for shares of Activision Blizzard Inc. with an average target price of $52.93.
Disclosure: I have no positions in any securities mentioned.
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