Activision Blizzard Turns To ProfitThursday, February 9, 2012
Despite slightly lower revenue, video game publisher Activision Blizzard Inc. said it shifted to a profit for its fourth quarter, as its latest "Call of Duty" game and other new titles sold well. Adjusted results beat Wall Street expectations.
After the markets closed on Thursday, the Santa Monica company reported net income of $99 million (8 cents per share), compared with a net loss of $233 million (-20 cents) in the same period a year earlier. Revenue fell 1 percent to $1.41 billion, although the company said "Call of Duty: Modern Warfare 3," and its new kids' game "Skylanders Spyro's Adventure," beat expectations.
Adjusted for deferred revenue and costs related to online games, Activision had earnings $725 million (63 cents) up more than 10 percent. Adjusted revenue was down 5 percent to $2.41 billion. Analysts surveyed by FactSet on average expected adjusted net income of 56 cents a share on revenue of $2.2 billion.
The company touted a strong showing with its growing online game division. More than seven million accounts have been created on the company’s "Call of Duty: Elite," subscription-based social-gaming network since it launched in November. Net revenue from its online-digital business accounted for more than 34 percent of the company’s total net revenue.
“As we continue to strengthen our leadership position in interactive entertainment, our proven management team and talented employees delivered another extraordinary year of outperformance,” said Chief Executive Bobby Kotick in a statement.
For the current quarter, Activision gave guidance of adjusted earnings of 3 cents a share on revenue of $525 million, falling significantly short of analysts’ expectations of adjusted earnings of 15 cents a share on revenue of more than $778 million. For the full year, the company expects earnings of 94 cents a share on revenue of $4.5 billion. That compared with the Wall Street consensus of 97 cents a share on revenue of $4.55 billion.
Activision shares earlier closed up 11 cents, or less than 1 percent, to $12.66 on the Nasdaq, and gained 1.6 percent in after-hours trading.