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What to Look For When Activision Blizzard Reports Earnings

Image source: Activision Blizzard.

Activision Blizzard (NASDAQ:ATVI) is scheduled to report earnings after the market closes on May 5. It will be the first look investors will get at how 2016 is unfolding. The first quarter is typically a slow time of the year, given the rush of sales that take place a quarter earlier for the holidays. But there are some significant moves the company is making, and here's what you should be keeping an eye on.

What Activision Blizzard expects
Activision Blizzard's own expectations should be the first thing to measure the first quarter by. Following are the key figures in the company's Q1 2016 earnings guidance.

Metric

GAAP

Non-GAAP

Net revenues

$1,260 million

$800 million

Operating margin

21%

20%

EPS

$0.21

$0.11

Beyond how it measures up to its guidance, there are two long-term factors that could end up transforming the company.

The big news in Q1 2016
King Digital Entertainment was officially acquired on Feb. 23, so the first impact it will make on Activision's financials will be the first quarter. In many ways, this is a test of the staying power of King Digital's products and ability to create future titles, as well as a test of Activision Blizzard's ability to move further downstream into mobile.

The...


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