Activision Profit Tops Estimates as King Adds to Digital Surgeby
Online sales jump 48%, accounting for bulk of quarter revenue
Three key businesses all register growth in monthly users
Activision Blizzard Inc. reported first-quarter profit that was almost double analysts’ projections, the result of surging online sales of video games, including those from recently acquired King Digital Entertainment. The company’s forecast for the second quarter also topped projections.
Profit rose to 23 cents a share, excluding some items, the Santa Monica, California-based company said in a statement Thursday, beating the 12-cent average of estimates compiled by Bloomberg. Adjusted revenue increased 29 percent to $908 million, beating projections of $814 million.
With sales of conventional, console-based video games slowing, Activision doubled down on the mobile-games business with the $5.9 billion purchase of King, maker of the Candy Crush Saga title and others, completed in February. That gave the company, already the biggest U.S. game maker, the No. 1 producer of mobile titles as well.
- Adjusted digital revenue grew 48 percent to $797 million.
- Activision’s monthly average users rose 10 percent to 55 million from a year earlier, while Blizzard’s advanced 23 percent to 26 million.
- King’s 463 million monthly average users grew 3 percent from the prior quarter.
Online play of games such as Call of Duty: Black Ops III and Hearthstone Heroes of Warcraft helped drive revenue growth, the company said.
For the current quarter, Activision forecasts profit of 38 cents a share, excluding items, compared with analysts’ projections of 34 cents. The company predicts sales of $1.38 billion, also on an adjusted basis, compared with analysts’ estimates of $1.33 billion.
For the year, Activision is projecting adjusted revenue of $6.28 billion and profit of $1.78 a share, both in line with analysts’ estimates.
Activision rose 1.8 percent to $34.91 at the close in New York. It’s down 9.8 percent this year.