Activision Blizzard’s Shares Drop 10.9% Despite Upbeat Q3 Results

Video game publisher Activision Blizzard, Inc. (ATVI) recently reported stronger-than-expected results for the quarter ended September 30, 2021. The robust results were driven primarily by the growth in net revenues.

However, following the earnings release, shares of the company declined 10.9% to close at $69.20 in the extended trading session.

Activision Blizzard reported quarterly net revenues of $2.07 billion, up 5.9% year-over-year. The figure also surpassed the consensus estimate of $1.88 billion. Revenues from In-game, subscriptions and other segments accounted for 79.6% of the company’s total net revenues.

The company reported quarterly earnings of $0.89 per share, up 1.1% year-over-year. Further, the figure surpassed the consensus estimate of $0.70 per share.

In other key operating metrics reported by the company, Activision Blizzard reported net bookings of $1.88 billion against $1.77 billion in the previous year. The company’s Monthly Active Users (MAUs) stood at 390 million at the end of the quarter.

Meanwhile, ATVI also provided guidance for the fourth quarter and 2021. For the fourth quarter, the company expects net revenue, earnings and net bookings of $2 billion, $0.62 per share and $2.78 billion, respectively. For 2021, it expects net revenue, earnings and net bookings of $8.66 billion, $3.70 per share and $8.65 billion. The consensus estimate for revenue and earnings stand at $8.8 billion and $3.83 per share, respectively.

The CEO of Activision Blizzard, Bobby Kotick, “We are excited about this week’s Call of Duty launch and expect continued success in the fourth quarter. I want to thank our employees for their continued commitment to each other, the company, and our players. We look forward to sharing progress updates on our workplace initiatives, alongside our business performance.” (See Activision Blizzard stock chart on TipRanks)

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Recently, Wedbush analyst Michael Pachter reiterated a Buy rating on the stock with a price target of $125, which implies upside potential of 60.9%.

Consensus among analysts is a Strong Buy based on 15 Buys and 3 Hold. The average Activision Blizzard price target of $111.87 implies upside potential of 44%. Shares have gained 1.9% over the past year.

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Activision Blizzard’s performance this quarter.

According to the tool, the Activision website recorded a 4.46% monthly decline in global visits in September. However, year-to-date, website traffic rose 0.77%.

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