Activision posts 3Q profit, backs 2009 outlook

Nov 05, 2009 By BARBARA ORTUTAY , AP Technology Writer
In this photo made Monday, Nov. 2, 2009, Activision's Guitar Hero video game is displayed at a Micro Center store in Santa Clara, Calif. Activision Blizzard Inc. releases quarterly earnings at the close of the market Thursday, Nov. 5, 2009.(AP Photo/Marcio Jose Sanchez)

(AP) -- It's been a rough year for the video game industry, but Activision Blizzard Inc. reported a profit for its third quarter because of a good response for games such as "Guitar Hero 5" and "World of Warcraft."

It also reaffirmed its guidance for the full year, citing a big expected launch next week for "Call of Duty: Modern Warfare 2."

Its shares climbed 23 cents, or 2.1 percent, to $11 in after-hours trading.

The company said Thursday its net income grew to $15 million, or a penny per share, in the latest quarter. In the same period of 2008 it lost $108 million, but the results are not completely comparable because Activision Blizzard was formed about 10 days into the year-ago quarter.

Revenue slid slightly to $703 million from $711 million.

On an adjusted basis, Activision earned 4 cents per share in the latest quarter, matching the average estimate of analysts polled by Thomson Reuters.

Its adjusted sales, which include revenue deferred from games' online components, was $755 million, surpassing Wall Street's expectations of $724 million.

CEO Bobby Kotick said in an interview that he hasn't seen a change in consumer behavior since the last time Activision reported its earnings, in August. The company boasts it has the industry's strongest slate of holiday releases, including "Modern Warfare 2," "Band Hero" and a new "Tony Hawk" skateboarding game, but Kotick said he sees no clear signs of how shoppers will spend this fall.

"What I am nervous about is ," he said.

Even so, the company expects to end the year on a high note while the industry as a whole is facing a decline. Activision said it expects $4.5 billion in adjusted revenue in the fourth quarter, roughly what Wall Street is predicting.

Earlier Thursday, three industry groups said unit sales across the world's three largest game markets declined 6 percent during the third quarter. The U.S. saw a 9 percent decline, according to the report, published by the NPD Group, GfK Chart-Track Ltd. and Enterbrain Inc.

Because a big chunk of its revenue comes from online subscriptions for "," a game with a dedicated following of millions, Activision is somewhat more insulated from the ups and downs of the retail economy than its counterparts that rely more on packaged sales.

The company, which is based in Santa Monica, Calif., was formed in July 2008 when French conglomerate Vivendi SA bought a majority stake in Activision and combined it with its games unit.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Line says no IPO this year

add to favorites email to friend print save as pdf

Related Stories

EA posts smaller 4Q loss as costs decline

May 05, 2009

(AP) -- Video game publisher Electronic Arts Inc. posted a smaller net loss Tuesday for its fiscal fourth quarter as it further slashed costs in a quarter that had fewer hit game launches.

EA 1Q loss widens but results surpass expectations

Aug 04, 2009

(AP) -- Lower revenue from packaged video games amid a seasonal slump for the industry gave Electronic Arts Inc. a larger net loss in its fiscal first quarter. But investors cheered as its adjusted results ...

Adobe 1Q profit, sales drop, squeezed by downturn

Mar 17, 2009

(AP) -- Adobe Systems Inc., the company behind the popular Photoshop software, posted a decline in fiscal first-quarter profit and sales Tuesday, squeezed by the economic downturn.

Soft PC sales send Microsoft profit down 29 pct

Jul 23, 2009

(AP) -- Microsoft Corp. said Thursday its profit in the last quarter plunged 29 percent because of weak computer sales, ending a fiscal year in which the software maker's revenue fell for the first time since ...

Cisco earnings fall 46 pct but beat expectations

Aug 05, 2009

(AP) -- Cisco Systems Inc. said earnings fell 46 percent in its latest quarter, but the profit beat Wall Street expectations, and the company said the quarter may have been the bottom of the recession-related ...

Recommended for you

Line says no IPO this year

2 hours ago

The Japan-based operator of popular mobile messaging app Line said Monday it has decided not to go ahead with an initial public offering in Japan or overseas this year.

Alibaba makes Wall Street debut

Sep 19, 2014

Alibaba made its long-awaited Wall Street debut Friday on the heels of a record stock offering that opens the door to global expansion for the Chinese online retail giant.

Alibaba IPO to boost employee fortunes to $8 bn

Sep 19, 2014

Employees of Chinese e-commerce giant Alibaba will see their fortunes swell to nearly $8 billion as the company prepares a massive US stock offering that could be valued at $25 billion.

User comments : 0