by Ian Harvey
May 13, 2020
Activision Blizzard reported Tuesday and blew past estimates with 21% growth in net bookings on strong sales amid lockdowns.
And, Stock Options Made Easy “Earnings Predictions” Members made potential profits of 223% based on a CALL OPTIONS trade.
Also, Stock Options Made Easy “Cut-to-the-Chase” Members made potential profits of 297% on a CALL OPTIONS trade executed on April 28, 2020.
“Cut-To-The-Chase” Members executed a trade on ATVI on Tuesday, April 28, 2020 and have now pocketed potential profits of 297%! The price of the options trade has climbed as high as $6.55.
The recommended options trade - Buy ATVI JUN 19 2020 70.000 CALL at approximately $2.70. (Entered the trade at $1.65)
On-top-of-that, “Earnings Predictions” Members executed a trade last week and are also sitting on potential profits of 223%. The price of the options trade has climbed as high as $12.61.
The recommended options trade - Buy ATVI JUN 19 2020 65.000 CALL at approximately $3.90.
ATVI, publisher of games like “Call of Duty” and
“Overwatch,” reported its Q1 2020 earnings on Tuesday, with net bookings
jumping 21% year-over-year, as the company saw a significant spike in demand
amid lockdown orders during the coronavirus pandemic.
March was the first $10 billion month for videogame
sales in history, and NPD Group said U.S sales reached their highest March
level since 2008.
Activision Blizzard reported first-quarter net
income of $505 million, or 65 cents a share, compared with $447 million, or 58
cents a share, in the year-ago period. Adjusted for items such as stock-based
compensation, among other things, earnings were 76 cents a share.
Revenue fell to $1.79 billion from $1.83 billion in
the year-ago period; Activision reported net bookings rose to $1.52 billion
compared with $1.26 billion a year ago.
Activision Blizzard voiced confidence that any economic slowdown
will not massively change the trajectory for videogames, citing periods of
growth during that recession as well as an earlier one.
Activision Blizzard Chief Financial Officer Dennis Durkin noted that in the dot-com bust and the 2008 financial crisis, gaming spending continued to grow in the low- to mid-single digits.
“We think that’s driven by the lost cost of our gaming, which makes it a great value versus other forms of entertainment,” Durkin said in Tuesday’s conference call.
For the remainder of the year, Activision Blizzard said that they anticipated continuing with a full slate of releases, and executives did not mention delays related to specific titles in the conference call Tuesday evening.
Activision Blizzard saw massive gains in users for its “Call of Duty: Modern Warfare” title during the quarter, boasting its best unit sell-through outside of a launch quarter. Part of that is thanks to the company’s launch of “Call of Duty: Warzone,” a free-to-download title that not only generates revenue through in-game purchases, but can also funnel players to the full “Modern Warfare” title.
The company also reported strong gains in its “World of Warcraft” franchise with new, and, importantly, returning players joining the classic massively multiplayer role-playing game. “Overwatch,” the company’s team-based shooter game, also saw growth in the quarter.
At King, Activision Blizzard’s mobile arm, the company saw 75% year-over-year growth in net advertising bookings. Lockdowns may have also spurred “Candy Crush” players to play more game rounds in the title than at any time since the King acquisition in 2016.
The company says its development cycle is largely on track, thanks to the digital nature of the gaming business.
Activision Blizzard develops titles at
studios around the world and said in its earnings call that working remotely
adds “complexity and challenges” to aspects of game development. Specifically,
Activision Chief Operating Officer Daniel Alegre said that it makes creative
collaboration, motion capture and quality assurance, among other things, more
difficult. He said the company has taken measures to minimize the impacts and
the company continues to expect its slate of titles this year, including a
release of “Call of Duty” and a “World of Warcraft” expansion.
Expectations for the gaming giant was high heading into Tuesday’s earnings, with analysts’ average price targets heading higher. J.P. Morgan analyst Alexia Quadrani wrote in an April note that she expected gaming giants would experience high levels of engagement and sales amid the coronavirus pandemic, noting the Superdata report.
Activision shares are up 45% in the past year and rose 5.8% in
after-hours trading on Tuesday.
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An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!