Consumer Products

What to Expect When EA and Activision Blizzard Report After the Close

Activision Blizzard Inc. (NASDAQ: ATVI) and Electronic Arts Inc. (NASDAQ: EA) are two staples of the video game industry. As the coronavirus pandemic has forced many to stay at home, these stocks have pushed toward all-time highs, as more people are turning to video games for entertainment.

Both companies are scheduled to release their most recent quarterly results after the markets close on Tuesday. 24/7 Wall St. has included some brief information on each ahead of the reports, including analyst estimates, recent trading history and more.

Activision Blizzard

For the first quarter, analysts are calling for $0.38 in earnings per share (EPS) and $1.32 billion in revenue. The same period of last year reportedly had $0.31 in EPS on $1.26 billion in revenue.

This remains a top gaming pick on Wall Street, and the BofA Securities team is still positive on the shares. Activision Blizzard develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide.

Activision Blizzard develops and publishes interactive entertainment software products through retail channels or digital downloads and downloadable content to a range of gamers. The company’s legacy franchise Call of Duty game continues to be hugely popular. The analysts said this when discussing its prospects:

The new Call of Duty Modern Warfare 2 remake includes remastered single-player campaign mode, but no online multiplayer. We expect low to mid-single digit millions of units based on sales performance of past remakes with revenues and earnings per share of $70 million and $0.06. Launch not financially significant as game included in guidance for “several remastered and re-imagined experiences” in 2020.

Excluding Tuesday’s move, Activision Blizzard stock had outperformed the S&P 500 and Dow Jones industrial average with a gain of about 12% year to date. In the past 52 weeks, the share price is up closer to 41%.

Activision Blizzard stock traded up about 1% to $67.68 on Tuesday, in a 52-week range of $41.84 to $68.32. The consensus price target is $69.71.

Electronic Arts

Analysts are forecasting $0.98 in EPS on $1.19 billion in revenue for the first quarter. The prior quarter reportedly had $1.31 in EPS and $1.36 billion in revenue.

Electronic Arts produces top-selling games and related content and services under the EA brand in various categories, including action-adventure, role-playing, racing and first-person shooter games.

This company is realizing a greater percentage of revenues from digital platforms, which may enhance margins and lead to more sustainable revenue growth. Key franchises for the company include Madden, FIFA, Need for Speed, Battlefield, Star Wars Battlefront, Mass Effect, Dragon’s Age and The Sims.

Overall, EA has outperformed the broad markets, with its stock up about 9% year to date. In the past 52 weeks, the share price is closer to 26% higher.

Electronic Arts stock was up less than 1%, at $117.57 in a 52-week range of $85.69 to $118.69. The consensus price target is $120.00.