By Malathi Nayak
SAN FRANCISCO Nov 6 Video game publisher
Activision Blizzard Inc, known for its "Call of Duty"
franchise, said it raised its 2013 forecast but lowered its
revenue estimates for the current quarter after warning that it
could face a challenging holiday period.
The company's stock dropped 2 percent in late trade from a
close of $16.53 on the Nasdaq.
Despite a bump in its 2013 forecast, Activision "cautioned
that there is some execution risk in Q4," Benchmark Company
analyst Mike Hickey said.
For the fourth-quarter, which is its crucial holiday period,
Activision lowered its non-GAAP revenue forecast to $2.22
billion from its prior expectation of $2.25 billion. This fell
short of Wall Steet's estimate of $2.29 billion, according to
Thomson Reuters I/B/E/S.
It also lowered its non-GAAP earnings per share to 72 cents
from a previous range of 76 cents to 79 cents per share, and
below Wall Street's view of 79 cents, according to Thomson
The company had said last quarter that it expects a rocky
holiday quarter because of heavy competition as its
just-launched "Call of Duty: Ghosts" will battle rival
Electronic Arts Inc's "Battlefield:4."
Moroever, its "Skylanders SWAP Force", a children's
fantasy-adventure game sold with actual toys that come to life
onscreen is competing with Disney's "Infinity", based on a
"Not being more specfic in terms of quantifying what is a
growth opportunity" in coming quarters "was a slight
disappointment," Hickey said.
RAISES 2013 OUTLOOK
Activision, which closed a $8.2 billion deal last month to
buy back most of its shares from French media conglomerate
Vivendi, said on Wednesday that it expects GAAP
earnings per share of 83 cents in 2013, compared to its previous
forecast in the range of 80 cents to 82 cents.
It also raised its estimate for 2013 GAAP revenue to $4.32
billion from $4.31 billion.
"Our overall comfort with the market" before the launch of
Sony Corp's PlayStation4 Microsoft Corp's Xbox
One consoles in coming weeks moved the company to raise its 2013
forecast, Chief Executive Bobby Kotick said in an interview.
"We feel like even with all the volatility of the new
console launches, we have a pretty good view into what's likely
going to happen and we are confident about our business," Kotick
The Santa Monica, Los Angeles-based company said its revenue
and income fell in the third quarter.
On a GAAP-basis, revenue dropped to $691 million from $841
million a year ago and net income also fell to 5 cents per share
from 20 cents per share, in the year-ago period. But results
surpassed Wall Street analysts expectations of revenue of $589.4
million and earnings per share of 3 cents, according to Thomson
The company said non-GAAP revenue, adjusted for the deferral
of digital revenue and other items, dropped 12.5 percent to $657
million from $751 million a year ago. It reported non-GAAP
income of 8 cents per share, compared to 15 cents per share in
the year-ago period.
Subscribers of its fantasy-action online game "World of
Warcraft," a large source of steady subscription-based revenue,
dropped slightly to 7.6 million in the third quarter from 7.7
million last quarter, the company said.
The latest title from its blockbuster "Call of Duty" video
game franchise surpassed $1 billion in sell-in sales - the
number of copies shipped to retailers - a day after its launch,
the company said on Wednesday.
Activision has been delivering a "Call of Duty" title every
year over the last decade and its tenth instalment "Call of
Duty: Ghosts," a military-themed shooter game, was released
worldwide on Tuesday.
The company has not yet divulged retail sales figures -
actual sales through retail channels - and the number of units
sold of its just-launched "Call of Duty: Ghosts."
When asked about retail sales of "Call of Duty: Ghosts,"
Kotick declined to comment or provide details.