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Activision Blizzard beats Q2 expectations, but harassment scandal casts shadow on earnings

·Technology Editor
·2 min read
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Video game giant Activision Blizzard (ATVI) reported its second quarter earnings after the closing bell on Tuesday, beating analysts' expectations on the top and bottom lines.

Here are the most important numbers from the report compared to what Wall Street was expecting, as compiled by Bloomberg.

  • Revenue: $1.92 billion versus $1.89 billion expected.

  • Earnings per share: $0.91 versus $0.75 expected.

Activision Blizzard is also calling for revenue of $1.85 billion in Q3 2020, outpacing analysts' expectations of $1.79 billion for the coming quarter, though earnings per share are expected to be $0.65 compared to expectations of $0.75.

The company's stock was up more than 5% following the earnings release.

Activision Blizzard's report comes in the wake of a recent sexual harassment and discrimination scandal, that rocked the company. Ahead of the earnings on Tuesday, Activision Blizzard president and COO Daniel Alegre announced that Blizzard’s president J. Allen Brack is leaving the company to explore other opportunities.

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Blizzard executive vice president of development Jen Oneal and executive vice president & general manager of platform and technology Mike Ybarra will be co-presidents of Blizzard.

Activision Blizzard made negative headlines this month when a California state agency filed a lawsuit alleging the video game giant fostered a “frat house” culture and that executives and employees sexually harassed female colleagues.

The suit also alleges that women of color, in particular, were targeted for discrimination, with one employee forced to provide a written summary of what she planned to during a day she requested off, something none of her colleagues were asked to do.

Last week, Activision Blizzard employees staged a walkout and demanded, among other things, that the company end practices including forced arbitration. Employees also criticized Activision Blizzard’s initial response to the suit, which claimed that the accusations of harassment were “distorted, and in many cases false, descriptions of Blizzard’s past.”

CEO Bobby Kotick followed up with an apology for the company’s prior statements by saying that they were “tone deaf.” The company has since hired an independent investigator to look into workplace issues.

In a statement attached to the Q2 report, the company said it is taking swift action to address the concerns raised by the suit and employees.

"We will be evaluating managers and leaders across the company with respect to their compliance with our processes for evaluating claims and imposing appropriate consequences," the company said. "And we will be adding resources to ensure and enhance our consideration of diverse candidate slates for all open positions."

Activision Blizzard’s competitor, Take-Two Interactive (TTWO), for example, ran into a brick wall Monday when it announced its earnings. Despite beating on the top and bottom lines, the company fell short on guidance expectations. Its stock price plummeted as of midday Tuesday.

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