Activision Blizzard Posts Record Quarterly Revenue

By Sarah E. Needleman 

Growing numbers of consumers with a videogame sweet tooth helped swell Activision Blizzard Inc. revenue and profit in the latest quarter, reflecting the value of last year's acquisition of the maker of the "Candy Crush Saga" games.

Activision Blizzard, the largest U.S. videogame publisher by market value, said revenue rose 49% to a quarterly record of $2.01 billion for the three months through Dec. 31. Net profit rose 60% to $254 million.

Activision Blizzard a year ago acquired "Candy Crush" maker King Digital, which added $436 million to the parent company's total revenue during the quarter compared with a year earlier, when it wasn't counted. Activision Blizzard said the amount of money spent per user of King's games, rose from last year and from the previous quarter.

Activision Blizzard also said people spent a record amount of time playing games from its Blizzard unit, namely its new hit "Overwatch." The company said special events helped drive engagement for "Overwatch," a multiplayer shooting game that has racked up more 25 million registered players since launching in late May.

Shares in Activision Blizzard jumped nearly 10% in after-hours trading on the results, to their highest level since late October.

Not all of the company's businesses are faring as well. Revenue at its core Activision unit, which accounts for about half of total sales, slid 23%. The unit's biggest product line, the "Call of Duty" franchise, ranked again as the top-selling videogame in the U.S. for 2016, but the company didn't cite the launch of the latest version, "Call of Duty: Infinite Warfare" -- its big holiday release -- as a major contributor. Activision Blizzard didn't disclose sales for the new game, whose setting was moved to outer space for the first time and faced competition from Electronic Arts Inc.'s "Battlefield 1."

But earlier in the quarter, the company warned it didn't expect the game to perform as well as its predecessor, 2015's "Call of Duty: Black Ops III."

On a per-share basis, profit in the latest quarter rose 57% to 33 cents. For the full year, Activision Blizzard said revenue rose 42% to $6.61 billion, while profit rose 8.3% to $966 million, or $1.28 a share. Digital revenue for all of 2016 rose 94% to $4.87 billion.

Analysts who cover videogame companies typically track financial measures adjusted for factors such as deferred sales of online services. Activision Blizzard, like its peers, stopped reporting those figures last year in favor of numbers based on generally accepted accounting principles, or GAAP. But based on its results statement, the company posted adjusted revenue for the 2016 fourth quarter of $2.45 billion. Analysts polled by Thomson Reuters expected adjusted revenue of $2.35 billion. Activision Blizzard's adjusted fourth-quarter profit was 92 cents a share, compared with the 73 cents a share that analysts' expected.

Activision Blizzard said it expects GAAP revenue for the first quarter of 2017 of $1.55 billion and per share profit of 25 cents.

Write to Sarah E. Needleman at [e-mail]

(END) Dow Jones Newswires

February 09, 2017 18:44 ET (23:44 GMT)

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