Activision 2Q net income climbs, revenue falls

Aug 05, 2010 By BARBARA ORTUTAY , AP Technology Writer

(AP) -- Activision Blizzard Inc. posted a higher net income for the second quarter Thursday as development expenses and other costs declined, but fewer game launches pushed revenue lower, shy of Wall Street's expectations.

Its shares dropped in after-hours trading, as Activision has a history of beating analysts' forecasts. Its third-quarter outlook was also short of estimates, though the company maintained its guidance for the full year. Shares fell 70 cents, or 6 percent, to $11.03 after-hours trading Thursday after the release of results.

The publisher of the blockbuster "" and "" games earned $219 million, or 17 cents per share in the April-June quarter, up 12 percent from $195 million, or 15 cents per share, in the same period a year earlier.

Its net fell 7 percent to $967 million from $1.04 billion.

On an adjusted basis that excludes special items and accounts for deferred revenue from games with online components, Activision earned $72 million, or 6 cents per share in the latest quarter. This is a penny above Wall Street's expectations.

Adjusted revenue, meanwhile, fell 15 percent to $683 million from $801. This is below the $719.8 million that analysts polled by Thomson Reuters had expected.

"I think we could have done better on the revenue side," said Chief Operating Officer Thomas Tippl. In addition to the strength of the dollar hurting revenue, "some of our new releases did not perform up to expectations," he said.

"Shrek Forever After" and the shooter "Singularity" are among these titles.

But strong sales of digital add-ons for "Call of Duty" games and a steady stream of revenue from loyal "World of Warcraft" subscribers helped offset the weaker titles.

Expenses fell 19 percent in the second quarter, as development and product costs dropped due to the lighter game release slate.

Tippl said that for the first time revenue from online channels - that is, game downloads from the company's Battle.net site, add-on content and subscriptions - outpaced retail sales during the quarter. Though retail is again expected to pick up during the holidays when many people buy games as gifts, this shows that the industry's aggressive push into digital distribution is beginning to pay off.

reaffirmed its guidance for the full year. For the current quarter, it forecast adjusted earnings of 8 cents per share on revenue of $725 million.

Analysts are expecting a profit of 12 cents per share on revenue of $911.9 million.

Explore further: IBM posts lower 1Q earnings amid hardware slump

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Activision 1Q profit up, shoots past expectations

May 06, 2010

(AP) -- Continued strong sales of "Call of Duty" and a steady stream of revenue from "World of Warcraft" subscribers helped double Activision Blizzard Inc.'s first-quarter net income.

Game sales strong for EA but outlook hurts shares

May 11, 2010

(AP) -- Video game publisher Electronic Arts Inc. said Tuesday that strong sales of games such as "Battlefield: Bad Company" and "Mass Effect 2" gave the company a quarterly profit above expectations. But its outlook fell ...

Activision posts 3Q profit, backs 2009 outlook

Nov 05, 2009

(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 ...

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 ...

TI 2Q revenue rises 42 pct as demand roars back

Jul 19, 2010

(AP) -- Texas Instruments Inc.' second-quarter income and revenue jumped as demand continued to recover after the recession. The company predicted even better results in the new quarter.

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.

Recommended for you

Weibo IPO below expectations, raises $285.6 mn

14 hours ago

Sina Weibo sold fewer shares than expected in its US IPO which was priced below expectations ahead of a Thursday listing that takes place after tech selloffs on Wall Street.

'Chief Yahoo' David Filo returns to board

15 hours ago

Yahoo announced the nomination of three new board members, including company co-founder David Filo, who earned the nickname and formal job title of "Chief Yahoo."

Fired Yahoo exec gets $58M for 15 months of work

15 hours ago

Yahoo's recently fired chief operating officer, Henrique de Castro, left the Internet company with a severance package of $58 million even though he lasted just 15 months on the job.

User comments : 0

More news stories

Hackathon team's GoogolPlex gives Siri extra powers

(Phys.org) —Four freshmen at the University of Pennsylvania have taken Apple's personal assistant Siri to behave as a graduate-level executive assistant which, when asked, is capable of adjusting the temperature ...

Better thermal-imaging lens from waste sulfur

Sulfur left over from refining fossil fuels can be transformed into cheap, lightweight, plastic lenses for infrared devices, including night-vision goggles, a University of Arizona-led international team ...

Researchers discover target for treating dengue fever

Two recent papers by a University of Colorado School of Medicine researcher and colleagues may help scientists develop treatments or vaccines for Dengue fever, West Nile virus, Yellow fever, Japanese encephalitis and other ...