- Activision Blizzard turned in a strong fourth quarter and gave upbeat guidance for Q1 2021.
- The company posted $2.4 billion in GAAP revenues beating its own estimates by $400 million.
- First person shooter “Call of Duty” sustained 100 million monthly active players, while online role-playing game “World of Warcraft” increased net bookings by 40%.
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Activision Blizzard stock spiked as much as 12% on Friday after the company announced strong quarterly results driven by the coronavirus stay-at-home audience.
More people are playing video games than ever before due to lockdowns and closures of competing entertainment venues.
In fact, video game industry revenue exceeded sports and film revenue for the first time in 2020, and gaming companies are taking advantage.
Activision Blizzard posted GAAP net revenues of over $2.4 billion for the quarter that ended in December, more than $400 million above its expectations.
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Much of the revenue growth came from the company’s blockbuster “Call of Duty” franchise.
“2020 was a record year for the “Call of Duty” franchise, in which premium and free-to-play experiences across platforms sustained more than 100 million monthly active players and drove franchise net bookings to approximately double the year-ago level,” Activision Blizzard wrote in an earnings press release.
The company’s Blizzard unit also outperformed in 2020, buoyed by the now 17-year-old “World of Warcraft” MMORPG. The game saw strong engagement, increasing net bookings by 40% year-over-year in large part due to the continued success of Classic-a retro version of the now nearly decades-old game.
Activision Blizzard outperformed in terms of earnings as well in the quarter, posting GAAP earnings per share of $0.65, which beat analyst estimates by $0.08. However, net income fell in the quarter to $507 million from $525 million in the year-ago period.
Despite the net income drop, CEO Bobby Kotick was pleased with the year’s results.
“In a year filled with adversity, our extraordinary employees were determined to provide connection and joy to our 400 million players around the world,” said Bobby Kotick, CEO of Activision Blizzard.
“They accomplished this as well as generating record financial results for our shareholders. Under difficult circumstances, but with the same conviction and focus, they will continue to do so in 2021,” Kotick added.
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Activision Blizzard also revealed a strong outlook for 2021 in their most recent earnings report. The company expects full-year adjusted sales to be $8.45 billion, slightly above Wall Street’s average estimate of $8.31 billion, according to data from Refinitiv IBES.
Activision Blizzard also increased its dividend to $0.47/share annually, a 14.6% increase from the prior dividend.
Overall, analysts are bullish on Activision Blizzard’s prospects. The company boasts 36 “buy” ratings, four “neutral” ratings, and zero “sell” ratings from analysts. KeyBanc even raised its price target on the stock to $120 from $102 after the earnings report.
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