Activision Blizzard Inc., the video-game publisher that bought out most of Vivendi SA’s controlling stake, posted third-quarter profit that beat analysts’ estimates. The forecast for this quarter fell short.
Earnings were 8 cents a share in the period ended Sept. 30, excluding items, Santa Monica, California-based Activision said yesterday in a statement, exceeding the 4-cent average of 22 analyst estimates compiled by Bloomberg. Adjusted revenue of $657 million topped analysts’ projections of $593.4 million.
Sales and profit, both down from a year ago, reflect the two-year drop in spending on traditional video games as more consumers play on mobile devices. Activision released new versions of the shooter title “Call of Duty” and “Skylanders,” which joins a video game with collectible toys, for the holidays while awaiting new consoles due this month from Microsoft Corp. and Sony Corp.
“You have to presume a significant number of players are going to wait until they have hardware and know what hardware they have before buying software,” Chief Executive Officer Bobby Kotick said in an interview.
Initial sales of “Skylanders: Swap Force” and “Call of Duty: Ghosts” were below year-ago introductions, Eric Hirshberg, CEO of Activision Publishing, said yesterday on a conference call. Like other publishers, Activision expects sales to pick up after gamers purchase the new consoles, he said.
Activision fell 2.4 percent to $16.13 in extended trading yesterday. The stock close unchanged at $16.53 in New York and has advanced 56 percent this year.
Profit this quarter, Activision’s biggest, will be 72 cents a share excluding items, the company said. That’s less than the prior forecast of 76 cents to 79 cents and analysts’ estimates of 78 cents.
The forecast includes a 4-cent reduction because of a delay in closing the Vivendi buyout, which resulted in more shares outstanding than expected, Activision said.
The company, along with an investor group led by Kotick, purchased most of Vivendi’s controlling stake in Activision for $8.17 billion in September, reducing the French company’s holdings to 12 percent.
Fourth-quarter sales will be $2.22 billion, Activision said, compared with the $2.29 billion average of 22 analysts’ estimates.
The latest “Call of Duty” sold more than $1 billion copies to retailers in the first day, Activision said yesterday in a separate statement. The company typically reports the number of copies sold to consumers, a sign sales were less than previous installments, said Michael Olson, an analyst at Piper Jaffray Cos. in Minneapolis who recommends buying the stock.
Third-quarter net income fell to $56 million, or 5 cents a share, from $226 million, or 20 cents, a year earlier. Total sales, including changes in deferred revenue, slumped 18 percent to $691 million, Activision said.