Activision Easily Bests Forecasts in Challenging Videogame Market
Activision Blizzard is raising its calendar-year outlook after its second quarter earnings beat analyst expectations.
The company recorded a profit of 20 cents a share on revenues of $1.05 billion, easily beating analyst expectations of a profit of 12 cents a share on revenues of $834.8 million, according to First Call.
But when you factor in official accounting methods, Activision’s results are down compared to the year-ago period.
In the second quarter, the company recorded a GAAP profit of 16 cents a share, down from 29 cents a share, and revenue of $1.08 billion, down from $1.15 billion.
That may be why the company’s stock is trading down 5.2 percent in after-hours trading, to $11.16 a share.
Still, Activision Blizzard remains one of the brighter spots in the videogame industry.
This week, Take-Two Interactive disappointed analysts with a wider than expected loss, and last week, Zynga shocked investors after wildly missing expectations. On Tuesday, Electronic Arts’ results were in line with expectations, although some areas showed signs of weakness.
Some of Activision’s highlights from the quarter include digital revenues of $343 million, representing 32 percent of the company’s GAAP revenues.
The company also had three of the top best-selling games in North America and Europe. They are Skylanders Spyro’s Adventures, Call of Duty: Modern Warfare 3 and Blizzard Entertainment’s Diablo III.
Because Activision was able to report such strong results in the second quarter, it is revising its full-year guidance for the second time. The company said it is now expecting non-GAAP revenues of $4.53 billion and non-GAAP earnings per share of 99 cents. In the second quarter, the company is forecasting earnings of 7 cents a share on revenues of $690 million.