Activision Blizzard Shares Rally On Stock Buyback And Dividend HikeActivision Blizzard shares managed to get above the $100 level.
Activision Blizzard Video 05.02.21.
Activision Blizzard Reported Strong Q4 Results
Shares of Activision Blizzard are gaining about 10% in today’s trading session after the release of a strong Q4 earnings report.
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Activision Blizzard reported revenue of $3.05 billion and GAAP earnings of $0.65 per share, beating analyst estimates on both earnings and revenue.
The company also increased its annual dividend from $0.41 per share to $0.47 per share. At the current stock price, Activision Blizzard yields 0.46%. It should be noted that game developers have never been considered as income stocks so Activision Blizzard’s dividend serves as an additional positive catalyst rather than a center of the bullish thesis.
Activision Blizzard has also announced a two-year stock repurchase program. The company can buy up to $4 billion of its common shares during this period, and the buyback program will likely provide additional support to the stock.
What’s Next For Activision Blizzard?
Activision Blizzard benefited from strong demand for its products during the pandemic. While the current virus containment measures are not as strict as the ones that were implemented in spring of 2020, demand for video games remains robust.
Call of Duty and World of Warcraft performed well in the fourth quarter of 2020, and the company believes that this momentum will be sustained in 2021. The company also noted that the first stage of regional testing for the mobile Diablo Immortal went well, and Blizzard planned further rounds of testing ahead of the launch planned for later this year.
Diablo is a very popular franchise, and the release of the mobile version will likely boost the company’s financial performance although Activision Blizzard did not include any material contribution from the title into its 2021 outlook.
Not surprisingly, analysts rushed to revise their forecasts after the release of Q4 results as solid financial performance, dividend hike and stock buyback are expected to serve as significant upside catalysts.
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