How Will Activision Blizzard (ATVI) Stock React to Upcoming Q1 Earnings?

Activision Blizzard (ATVI) stock is declining before the company reports its 2016 first quarter financial results on Thursday after the market close.

Author:: Amanda Gomez
Publish date:: May 3, 2016 3:44 PM EDT

NEW YORK (TheStreet) -- Activision Blizzard (ATVI) - Get Report stock is falling 1.68% to $34 in afternoon trading on Tuesday ahead of the company's 2016 first quarter results, due out after Thursday's market close.

The Santa Monica, CA-based video game developer and publisher is expected to report a year-over-year decline in earnings per share, but a 13.4% increase in revenue.

Analysts have estimated earnings of 12 cents per share on revenue of $812 million for the latest quarter, compared with earnings of 16 cents per share on revenue of $703 million for the same quarter in 2015.

Revenue will be driven by the acquisition of King Digital, which closed in February, as well as digital sales from "Hearthstone" and "Call of Duty," MKM Partners analysts wrote in a note released this morning.

"The company's game lineup for 2016 remains attractive and in our view, the solid product depth and a conservative outlook for King Digital should lead to upward estimate revisions as the year progresses," analysts added while maintaining a "buy" rating on the company.

Separately, Activision Blizzard has a "buy" rating and a letter grade of B at TheStreet Ratings because of the solid stock price performance, reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures.

You can view the full analysis from the report here: ATVI

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.