Activision Raises Outlook After Reporting Strong Call of Duty Preorders

Activision reported that an unprecedented level of preorders for its first-person shooter, Call of Duty, will help it annihilate previous expectations for the fourth quarter.

The game, which was released today, is expected to be the videogame publisher’s top-selling title this year, even though it faces steep competition from Electronic Arts’ Battlefield 3 title.

The company also said today that other franchises, including a brand new game called Skylanders, enjoyed unexpectedly high adoption from users.

“Based on our third-quarter performance, stronger than expected consumer response to our new entertainment property, Skylanders: Spyro’s Adventures, and Call of Duty: Modern Warfare 3, we are raising our full-year financial outlook and expect once again to deliver record operating margins and the highest earnings per share in our company’s history,” said Activision’s CEO Robert Kotick, in a release.

Skylanders uses small miniature toys that come to life in the videogame across multiple platforms.

In the third quarter, the company reported Q3 revenues of $754 million, up from $745 million, and a profit of $148 million, or 13 cents a share, up from $51 million, or 4 cents a share in the year-ago period. On an adjusted basis, the company recorded a profit of 7 cents a share.

Results easily beat analyst expectations, who were expecting, on average, adjusted earnings of two cents a share on revenue of $564.8 million, according to a poll by FactSet.

The company was previously expecting revenues of $4.18 billion, or 68 cents a share. It has now upped those estimates to $4.33 billion, or 76 cents a share.

During regular trading today, shares of Activision Blizzard at one point rose nearly 3 percent to $14.11, which put the stock to a new three-year high. The stock ended up closing up 1.38 percent, but in after-hours trading the stock continued to jump, increasing more than 4 percent to $14.55.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik