Activision Blizzard saw about a 500 bps decline in operating margin (for its three segments) in Q3, while it was down over 1000 bps for the nine months ending Sep 2022. The company’s adjusted net income of $539 million in Q3 reflected a 23% fall from its $699 million figure seen in the prior year quarter. Activision Blizzard’s Q4 adjusted earnings per share (EPS) is expected to be $1.49 per Trefis analysis, compared to the $1.51 consensus estimate and $1.25 the company reported in the prior-year quarter. (2) EPS likely to be slightly below the consensus estimates What’s Next For Activision Blizzard Stock?. What’s Next For Activision Blizzard Stock After FTC Plans To Block The Microsoft Acquisition?. Up 10% In A Month, Does Activision Blizzard Stock Have More Upside?. What’s Next For Activision Blizzard Stock After An 11% Fall Yesterday?. What’s Happening With Activision Blizzard Stock?. Our dashboard on Activision Blizzard Revenuesoffers more details on the company’s segments. Looking back at Q3, the company reported revenue of $1.8 billion, reflecting a 13.9% y-o-y decline, as a 10% growth in Blizzard and a 6% rise in King segment sales were more than offset by a 25% fall in Activision segment revenues. Some other games, including Diablo Immortal and Candy Crush games, have been doing well in the recent past, a trend expected to continue. The company should benefit from its latest Call of Duty game released in Q4. This compares with the $2.5 billion in sales the company reported in the prior-year quarter. Trefis estimates Activision Blizzard’s Q4 revenues to be around $2.9 billion, vs. (1) Revenues expected to be below the consensus estimates Our interactive dashboard analysis on Activision Blizzard Earnings Preview has additional details. Although we don’t expect any earnings surprise from Activision Blizzard, our forecast indicates that ATVI stock is undervalued, partly due to concerns over the pending acquisition by Microsoft, as discussed below. It will be interesting to see if this trend reversed in Q4 with the launch of the next Call of Duty game, which topped the 2022 charts in sales. 
Activision has seen a decline in average monthly users over the recent quarters. We expect ATVI stock to trade lower, with its revenue and earnings likely falling below the street estimates. Activision Blizzard (NASDAQ: ATVI) is scheduled to report its fiscal Q4 results on Thursday, Feb 2.
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