NEW YORK ‚Äî Santa Monica-based Activision Blizzard Inc. posted lower earnings and revenue in the third quarter because it had fewer big game launches than a year earlier, but the results handily beat Wall Street‚Äôs expectations.
Activision raised its earnings guidance for the full year to above analysts‚Äô estimates, even as it lowered its outlook for the fourth quarter.
The company said Wednesday that it earned $56 million, or 5 cents per share, down from $226 million, or 20 cents per share, in the July-September quarter a year ago.
Revenue fell to $691 million from $841 million.
On an adjusted basis, a figure more closely watched by investors, Activision earned 8 cents per share on revenue of $657 million. On this basis, analysts were expecting earnings of 3 cents per share on revenue of $593.4 million, according to a poll by FactSet.
Adjusted figures exclude special items and account for the effects of deferring revenue and related cost of sales for games with online components. Like other video game companies, Activision spreads these out over time, while the game is played, rather than recognizing them all at once.
The company launched “Call of Duty: Ghosts,” the latest version if its blockbuster shooter game, on Wednesday. The game is expected to drive holiday sales, though CEO Bobby Kotick cautioned that the fourth quarter presents “a unique and challenging landscape due to increased competition and uncertainties surrounding the console transition.”
Sony Corp. and Microsoft Corp. are both releasing new video game consoles later this month.
In an interview, Kotick also said that there are “some questions” surrounding consumer confidence leading up to the holidays, but he expressed confidence that Activision can navigate well.
“The company is in a much better position than it ever has been,” he said.
Activision recently became independent from its majority shareholder, the French conglomerate Vivendi SA. Activision and an investor group led by Kotick and co-chairman Brian Kelly completed the purchase of Vivendi‚Äôs majority stake in the company in October. Vivendi retains a minority stake.
For the fourth quarter, the company expects adjusted earnings of 72 cents per share on revenue of $2.22 billion, down from its prior guidance of earnings of 76 cents to 79 cents per share and revenue of $2.25 billion.
Analysts were expecting earnings of 80 cents per share on revenue of $2.29 billion.
The company raised its guidance for the full year. It now expects adjusted full-year earnings of 89 cents per share on revenue of $4.29 billion. It previously forecast adjusted earnings of 85 cents to 87 cents per share on revenue of $4.25 billion for the full year.
Analysts expected earnings of 87 cents per share on revenue of $4.29 billion for the year.
Shares of Activision had closed unchanged at $16.53 but slipped 34 cents to $16.19 in extended trading after the results came out.