Activision Blizzard Profit Misses Street, Shares Down - Update

(RTTNews) - Activision Blizzard Inc. (ATVI) on Thursday reported a drop in profit for the fourth quarter, as revenues declined reflecting weak demand for Skylanders SuperChargers and Guitar Hero Live. The video game publisher's profit and revenues fell short of Wall Street estimates. Moving ahead, the company detailed a strong outlook for the full-year 2016.

Santa Monica, California-based Activision's fourth-quarter profit dropped to $159 million or $0.21 per share from $361 million or $0.49 per share last year.

Adjusted earnings for the quarter dropped to $0.83 per share from $0.94 per share last year. On average, 18 analysts polled by Thomson Reuters expected earnings of $0.86 per share for the quarter. Analysts' estimates typically exclude special items.

Activision's fourth-quarter revenues declined to $1.35 billion from $1.58 billion last year. Adjusted revenues dropped to $2.12 billion from $2.21 billion a year ago. Analysts had a consensus revenue estimate of $2.20 billion for the quarter.

The company has started expanding its business from console-based gaming to games for mobile devices. Activision recently purchased King Digital, the maker of "Candy Crush Saga" for $5.9 billion.

"Call of Duty: Black Ops III" was the number one selling game globally for the calendar year. However, casual games Skylanders SuperChargers and Guitar Hero Live performed weaker than the company expected, largely due to greater competition in the toys to life genre and due to the casual audience's shift to mobile devices.

Looking forward to the first quarter, the company expect adjusted earnings of $0.11 per share and adjusted revenues of $800 million. Analysts currently expect earnings of $0.18 per share on revenues of $744.8 million.

For calendar year 2016, the company expect adjusted earnings of $1.75 per share and adjusted revenues of $6.25 billion. Analysts currently expect earnings of $1.57 per share on revenues of $5.04 billion for the year.

ATVI closed Thursday's trading at $30.52, up $0.37 or 1.23%, on the Nasdaq. The stock, however, dropped $4.83 or 15.83% in the after-hours trade.