Business Corpus: Activision Blizzard Stock Falls On Low Sales Guidance For Second QuarterVideo game publisher Activision Blizzard late Thursday reported sales and earnings for the first quarter that beat expectations, but shares fell on low sales guidance. The post Activision Blizzard Stock Falls On Low Sales Guidance For Second Quarter appeared first on Investor's Business Daily.

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Video game publisher Activision Blizzard (ATVI) on Thursday reported better-than-expected sales and earnings for the first quarter, but shares fell on its low revenue guidance for the current quarter.

Activision stock fell more than 6% after the earnings report leaked early. Shares were halted pending the official news release. Once trading resumed just before the close, though, the stock fluctuated between positive and negative ground. The Santa Monica, Calif.-based company had been scheduled to report March quarter results after the market close.

Shares tumbled 2.3% to close at 66.82 on the stock market today.

Activision earned an adjusted 38 cents a share, up 23% year over year, in the March quarter. That came on adjusted sales of $1.38 billion, up 16%. Analysts expected 35 cents and $1.32 billion.

Sales Outlook Falls Short

For the current quarter, Activision expects to generate adjusted sales of $1.38 billion. That compared with Wall Street's target of $1.49 billion.

For the full year, Activision is looking for adjusted sales of $7.48 billion, vs. the consensus view of $7.51 billion.

It did not give a forecast for adjusted earnings per share to compare with analyst estimates.

Strong sales related to the company's "Call of Duty" franchise and King mobile games drove Activision's first-quarter results, Baird analyst Colin Sebastian said in a report.

"Activision Blizzard reported decent results, in particular relative to the amount of intra-quarter angst over competition from Fortnite," he said.

'Fortnite' Trouble

The popularity of free-to-play game "Fortnite Battle Royale" from Epic Games caused analysts to speculate that gamer time and money would shift away from Activision and other large publishers.

Second-quarter sales guidance is below consensus, but Activision management tends to be conservative, Sebastian said. He reiterated his outperform rating on Activision stock with a price target of 80.

"Activision Blizzard had another strong quarter, growing year over year, setting top and bottom line records, and over-performing guidance," Activision Chief Executive Bobby Kotick said in a news release. "Our continued ability to set new records speaks to the quality of our teams and the breadth and enduring nature of our portfolio of franchises against the backdrop of a large and growing interactive market."

Activision had 374 million monthly active users last quarter across its game franchises. Key franchises include "Call of Duty," "Overwatch," "World of Warcraft" and "Candy Crush."

Activision is the first of the major U.S. video game publishers to report March quarter results. Electronic Arts (EA) is scheduled to report its fiscal fourth-quarter results on Tuesday. Take-Two Interactive Software (TTWO) is due to post its fiscal fourth-quarter results on May 16.

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