Video game maker Activision scores big gains in 3Q
SANTA MONICA, Calif. (AP) — Video game maker Activision Blizzard Inc. scored points in the third quarter with a performance that topped analysts' forecasts.
The results announced Wednesday encouraged management to predict more good times in the crucial holiday shopping season when the company is counting on video game aficionados to snap up the latest edition in its popular "Call of Duty" franchise.
Activision credited "Diablo III," a role-playing game designed for personal computers, and its latest version of "World of Warcraft" for moving its latest quarter to a higher level.
The company earned $226 million, or 20 cents per share, for the three months ending in September. That represented a 53 percent increase from net income of $148 million, or 13 cents per share a year ago.
Excluding items unrelated to its ongoing business, Activision made 15 cents per share. The company beat the average estimate of 8 cents per share among analysts surveyed by FactSet. Adjusted earnings included a gain of 4 cents per share from the resolution of a U.S. tax audit.
Revenue for the period increased 12 percent from last year to $841 million. That figure, though, includes sales of games with online components, a revenue stream that the company and analysts prefer to spread out over time.
With that adjustment, Activision's third-quarter revenue would have risen by 20 percent to $751 million — about $41 million above analysts' projections.
The third quarter ended with a flourish as Activision sold 2.7 million copies of "World of Warcraft: Mists of Pandaria" in the first week after its Sept. 25 release.
CEO Bobby Kotick believes Activision has another hit on its hand with "Call of Duty: Black Ops II," scheduled to go on sale Tuesday.
"We feel good about our product line-up, in spite of a difficult and challenging macroeconomic environment that could worsen," Kotick said in an interview Wednesday.
Activision, based in Santa Monica, Calif., doesn't expect the weak economy to keep people from buying its games as gifts during the upcoming holidays.
In the fourth quarter the company expects adjusted earnings of 70 cents per share on adjusted revenue of $2.41 billion. Analysts, on average, expect adjusted earnings of 67 cents per share on adjusted revenue of $2.34 billion.
Activision shares rose 23 cents, or 2 percent, to $11.36 in after-hours trading following the release of its earnings report.