Activision Blizzard (ATVI.US) stock rose sharply after major game developer posted better than expected results in the latest quarter partially thanks to high sales of its 'Call of Duty' franchise during the Christmas season.
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Earnings per share came in at $1.87 versus estimates of $1.52.
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Group adjusted revenues, which exclude deferrals, rose 43.4% to $3.57 billion in revenue, beating Refinitiv estimates of $3.16 billion
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In-game net bookings jumped 46.8% to $1.82 billion, while monthly active users (MAU) rose 4.9% YoY to 389 million, beating market expectations of 388.4 million.
Highlights of Activision Blizzard Q4 earnings report. Adjusted earnings fell sharply despite higher revenues. Rising number of MAU is an optimistic sign. Source: Alpha Street
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For Q1, the company expects "last least" a high teens year-on-year percentage growth rate for GAAP revenues, with mid-teens level gains for net bookings.
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"We ended 2022 with record quarterly net bookings as we delivered on our mission to bring epic joy to players," said CEO Bobby Kotick. "I’m grateful to our talented and hardworking teams for their many successes entertaining our hundreds of millions of players around the world."
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"Our experts have noted a broader flight to quality from gamers over the past year, but believe that Activision Blizzard is well positioned to be a winner of this trend given the strength of its two key franchises, 'Call of Duty' and 'World of Warcraft'," said Third Bridge analyst Nicholas Cauley.
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On the other hand, uncertainty regarding planned $69 billion takeover l by Microsoft (MSFT.US), may limit upside potential. Deal faces a backlash from regulators around the world, including Britain's Competition and Markets Authority, which launched an investigation in September 2022.
Activision Blizzard (ATVI.US) stock bounced off the lower limit of the triangle formation at the beginning of today's session and is currently testing local resistance at $75.40, which coincides with 38.2% Fibonacci retracement of the downward move started in February 2021. Break above the upper limit of the triangle formation would be a first sign of potential reversal of the main downward trend. Source: xStation5
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