Activision Blizzard Profit Declines 35%

Activision Blizzard Inc. believes it has a lot of punch prepared for the holiday shopping season, and it's spending big to get there.

The company recently disclosed it is spending $500 million on "Destiny," a new space-age shooting videogame from the developers of the blockbuster "Halo" franchise, as part of a decadelong commitment. Activision has said it expects the game to be a billion-dollar franchise.

Bobby Kotick, Activision's chief executive, said he believes Destiny will "Have a long useful valuable life." "We hope it to be the most successful new [game franchise] launch we've had," he said.

The company said its first-quarter profit declined 35% to $293 million, or 40 cents a share, from $456 million, or 40 cents a share--based on a dramatically higher share count--the same time a year earlier. Revenue also fell 16% to $1.1 billion from $1.3 billion a year earlier.

Adjusting for deferred revenue and other items, Activision said it earned 19 cents per share on $772 million in sales. Analysts on average had been expecting 10 cents per share on $688 million in sales, according to surveys by Thomson Reuters.

For the current quarter, Activision said it expected adjusted earnings of 1 cent a share, below analysts expectations of 5 cents a share. Revenue, Activision projected, will be $600 million, higher than the $580 million analysts expect.

For the year, Activision raised its forecast by a penny on an adjusted basis, projecting a profit of $1.27 per share, slightly below analyst expectations of $1.29 per share. Revenue is expected to be about $4.7 billion, roughly in line with analyst expectations.

Write to Ian Sherr at [e-mail]

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