Activision Blizzard's quarterly profit beats on "Call of Duty" strength

(Reuters) - Activision Blizzard Inc (ATVI.O) topped Wall Street estimates for quarterly profit on Thursday, driven by sales of its blockbuster videogame, “Call of Duty”, but forecast current-quarter and full-year revenue below expectations.

FILE PHOTO: A crowd waits for a video presentation at the Activision booth during the 2014 Electronic Entertainment Expo, known as E3, in Los Angeles, California June 11, 2014. REUTERS/Jonathan Alcorn/File Photo

The company is slated to release “Call of Duty: Black Ops 4” as well as “World of Warcraft: Battle for Azeroth” and “Destiny 2: Forsaken” in the second half of the year.

“Pre-orders are strong,” Activision President Collister Johnson said on a post-earnings call.

The company forecast 2018 adjusted profit of $2.58 per share and revenue of $7.48 billion, while the Street was expecting a profit of $2.60 per share and revenue of $7.52 billion.

Rivals Electronic Arts (EA.O) and Take Two Interactive Software (TTWO.O) have also lined up a clutch of games such as “FIFA 19”, “NBA 2K 19”, “Red Dead Redemption 2” and “Battlefield V” to be released in the second half of 2018.

The results from videogamers come in the backdrop of the massive success of games from the “battle royale” genre such as “Fortnite” and “PlayerUnknown’s Battlegrounds”.

Activision is also tapping into the rising popularity of e-sports through its Overwatch league and recently signed a multi-year agreement with ESPN and Disney XD for live coverage of the league.

“As the mainstream popularity of e-sports continues to grow, we’re well positioned to leverage the success of our Overwatch League model to develop new eSports opportunities in the future,” Chief Executive Robert Kotick said on the call.

Activision said it expected third-quarter adjusted revenue of $1.62 billion and profit of 47 cents per share, below analysts’ average estimate of $1.87 billion and 66 cents per share.

Wedbush Securities analyst Michael Pachter said the lower current-quarter forecast was primarily because the year-ago period was boosted by the success of “Destiny 2”. The game brought in around $450 million a year ago, he said.

The videogame publisher’s net income jumped to $402 million, or 52 cents per share, in the second quarter, from $243 million or 32 cents per share, a year earlier.

Excluding items, the company earned 41 cents per share, beating the average analyst estimate of 35 cents.

The company, which is behind popular franchises such as “Skylanders”, said total adjusted revenue fell 2.3 percent to $1.39 billion in the quarter.

Analysts on average had expected $1.38 billion, according to Thomson Reuters I/B/E/S.

Shares of the company seesawed in after-market trading, to be down marginally at $73.40.

Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila

(Original source)