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Activision Blizzard Inc. (ATVI), the largest U.S. video-game maker, posted second-quarter results that beat analysts’ estimates, citing online sales of World of Warcraft and Diablo titles.
Profit excluding items totaled 6 cents a share in the second quarter, Santa Monica, California-based Activision said yesterday in a statement. That exceeded the 2-cent average of 23 analysts’ estimates compiled by Bloomberg. Sales, also reported on an adjusted basis, rose 8.2 percent to $658 million and topped analysts’ projections of $607.6 million.
Chief Executive Officer Bobby Kotick credited digital sales of World of Warcraft, Diablo III: Reaper of Souls and Hearthstone, a new title from the Blizzard division. The industry is preparing to release new titles for the holidays targeting owners of the new generation of consoles, Sony Corp.’s PlayStation 4 and the Xbox One from Microsoft Corp.
“We have a really exciting content pipeline, one of the best that we’ve ever had,” Kotick said in a telephone interview. “I think our audiences are going to be excited.”
Activision projects third-quarter profit of 11 cents a share excluding items, with sales of $975 million on an adjusted basis. Analysts estimate profit of 13 cents on sales of $898 million. Over the next few months, Kotick has scheduled new versions of Skylanders, Call of Duty and World of Warcraft.
The company raised its full-year forecast, projecting profit, excluding items, of $1.29 a share, and revenue of $4.7 billion. Activision previously estimated $4.68 billion in sales and profit of $1.27 a share. Analysts see $1.31 a share, with revenue of $4.71 billion.
“Call of Duty will likely be the most successful game of 2014,” Kotick said. “Destiny, we think, will be the most successful new intellectual property that’s ever been released.”
Activision has said it may spend as much as $500 million to create and market titles such as Destiny, a shooter game that comes out Sept. 9 and is expected to sell more than 10 million units, Michael Pachter, an analyst with Wedbush Securities Inc., wrote prior to yesterday’s earnings report.
Doug Creutz, an analyst with Cowen & Co., said sales could top 20 million, as pre-order data from Amazon.com Inc. suggest the game will be the best-seller this year.
Activision’s new Call of Duty, expected to be released on Nov. 4, may also have less competition from shooter games, including Electronic Arts Inc. (EA)’s new Battlefield, which has been delayed until after the holidays, Pachter said.
Activision rose 3.5 percent to $23.14 at 9:46 a.m. in New York. The stock has gained 25 percent this year through yesterday.
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