Activision Blizzard, Inc. (ATVI) has reported a 17.36 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $426 million, or $0.56 a share in the quarter, compared with $363 million, or $0.48 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $546 million, or $0.72 a share compared with $441 million or $0.58 a share, a year ago.
Revenue during the quarter grew 18.63 percent to $1,726 million from $1,455 million in the previous year period. Gross margin for the quarter contracted 15 basis points over the previous year period to 66.11 percent. Total expenses were 71.44 percent of quarterly revenues, up from 68.32 percent for the same period last year. That has resulted in a contraction of 312 basis points in operating margin to 28.56 percent.
Operating income for the quarter was $493 million, compared with $461 million in the previous year period.
However, the adjusted operating income for the quarter stood at $747 million compared to $621 million in the prior year period. At the same time, adjusted operating margin improved 60 basis points in the quarter to 43.28 percent from 42.68 percent in the last year period.
Bobby Kotick, chief executive officer of Activision Blizzard, said, "This quarter we delivered record revenues, earnings per share and cash flow, and over-performed guidance."
For fiscal year 2017, Activision Blizzard, Inc. forecasts revenue to be $6,100 million. It projects adjusted revenue to be $6,100 million. It expects diluted earnings per share to be $0.88. It projects diluted earnings per share to be $1.80 on adjusted basis for the same period.
For the second-quarter, Activision Blizzard, Inc. forecasts revenue to be $1,425 million. It projects adjusted revenue to be $1,425 million. It expects diluted earnings per share to be $0.15. It projects diluted earnings per share to be $0.38 on an adjusted basis for the same period.
Working capital increases sharply
Activision Blizzard, Inc. has recorded an increase in the working capital over the last year. It stood at $2,117 million as at Mar. 31, 2017, up 25.56 percent or $431 million from $1,686 million on Mar. 31, 2016. Current ratio was at 1.95 as on Mar. 31, 2017, up from 1.73 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 3 days for the quarter from 14 days for the last year period. Days sales outstanding went down to 27 days for the quarter compared with 33 days for the same period last year.
Days inventory outstanding has decreased to 4 days for the quarter compared with 21 days for the previous year period. At the same time, days payable outstanding went down to 33 days for the quarter from 40 for the same period last year.
Debt comes down
Activision Blizzard, Inc. has recorded a decline in total debt over the last one year. It stood at $4,393 million as on Mar. 31, 2017, down 24.79 percent or $1,448 million from $5,841 million on Mar. 31, 2016. Total debt was 25.96 percent of total assets as on Mar. 31, 2017, compared with 33.76 percent on Mar. 31, 2016. Debt to equity ratio was at 0.47 as on Mar. 31, 2017, down from 0.70 as on Mar. 31, 2016.
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