Activision Blizzard Inc. (ATVI), the world's largest video game publisher, said Wednesday after the markets closed that its first quarter profit rose from last year, driven by continued strong performance of its key franchises and successful debut of its "Starcraft II: Heart of the Swarm" PC game.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its adjusted revenue.
However, the company gave an in-line earnings outlook and down-beat revenue forecast for the second quarter.
Based on its first quarter results, the company slightly raised its outlook for calendar year 2013, but the latest figures came in below analysts' current consensus estimates.
Bobby Kotick, Chief Executive Officer, Activision Blizzard, said, ""While we have had a solid start to the year, we now believe that the risks and uncertainties in the back half of 2013 are more challenging than our earlier view, especially in the holiday quarter. The shift in release dates of competing products, the disappointing launch of the Wii U, uncertainties regarding next-generation hardware, and subscriber declines in our World of Warcraft business all raise concerns, as do continued challenges in the global economy. For these reasons, we remain cautious."
Activision Blizzard shares are currently losing 5.96% in after hours trading after closing the day's regular trading session at $15.26, up 32 cents or 2.14%. The shares trade in a 52-week range of $10.45 to $15.40.
Santa Monica, California-based Activision Blizzard, which is a subsidiary of French media and telecoms giant Vivendi SA, reported net income for the first quarter of or $456 million or $0.40 per share, compared to $384 million or $0.33 per share for the year-ago quarter.
Excluding items, adjusted net income for the first quarter was $199 million or $0.17 per share, compared to $67 million or $0.06 per share in the prior year quarter.
On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.11 per share for the first quarter. Analysts' estimates typically exclude special items.
The maker of the "World of Warcraft" and "Call of Duty" titles said net revenues for the first quarter rose to $1.32 billion from $1.17 billion a year ago, while adjusted revenue increased to $804 million from $587 million last year. Twenty-two analysts had a consensus revenue estimate of $704.20 million for the first quarter.
Blizzard Entertainment launched StarCraft II: Heart of the Swarm. On March 12. As of the end of its first two days of sales, Heart of the Swarm had sold through about 1.1 million copies worldwide.
As of March 31, Blizzard Entertainment's World of Warcraft remains the #1 subscription-based MMORPG, with 8.3 million subscribers, although the game saw declines of about 1.3 million subscribers, mainly from the East, but in the West as well.
For the first quarter, Blizzard Entertainment had two top-10 PC titles in both North America and Europe with StarCraft II: Heart of the Swarm and Diablo III. For the quarter, Call of Duty: Black Ops II was the #2 best-selling title in dollars in North America and Europe combined.
On April 16, Activision Publishing released Call of Duty: Black Ops II Uprising, a downloadable content map pack for the Xbox 360 video game console from Microsoft Corp. (MSFT). The company expects to release Uprising for other platforms later in the quarter.
Looking forward to the second quarter, the company forecasts net revenue of $980 million, adjusted net revenue of $590 million, earnings of $0.21 per share and adjusted earnings of $0.05 per share. Analyst currently expect the company to earn $0.05 per share on revenue of $605.28 million for the second quarter.
For the calendar year 2013, the company now forecasts net revenue of $4.22 billion, adjusted net revenue of $4.25 billion, earnings of $0.73 per share and adjusted earnings of $0.82 per share. Previously, the company forecast net revenue of $4.085 billion, adjusted net revenue of $4.175 billion, earnings of $0.68 per share and adjusted earnings of $0.80 per share.
Analyst currently expect the company to earn $0.85 per share on revenue of $4.26 billion for the full year 2013.
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