Outlook: Will Activision Continue to Beat Consensus?
Activision (NASDAQ:ATVI) will report its fiscal Q3:13 (ending September) results after market close on Wednesday, November 6, and hold a call at 1:30 p.m. PT (800-768-6544, passcode: 7807006, or at http://ir.activisionblizzard.com/events.cfm).
We expect Q3 revenue and EPS above consensus and guidance. Our estimate for revenue of $610 million is above consensus of $589 million, our pro forma EPS estimate of $0.05 is above consensus of $0.03. Guidance for revenue was $585 million and adjusted EPS guidance was $0.03.
In September, Activision’s retail sales were up 194 percent from August and up 71 percent from last September led by Diablo III, which was released on HD consoles almost seventeen months after its PC debut with 550,000 units, well above our estimate of 150,000 units. Demand for the console ports was clearly much stronger than we had anticipated. The success of the Diablo III port makes us optimistic about the potential for Activision’s other PC franchises (e.g. StarCraft and Warcraft) on next-gen consoles in coming years. Call of Duty: Black Ops II led sales during July and August, while catalogue sales were led by Skylanders Giants.