ATVI Activision Blizzard Inc

By Sarah E. Needleman 

Activision Blizzard Inc. said a key revenue measure more than doubled in the latest quarter, with a superhero-themed videogame driving strong performance in a period when major rivals stumbled.

Activision Blizzard said revenue adjusted to account for factors including deferred sales of online services rose to $1.61 billion in the quarter that ended June 30 from $759 million in the year-ago period. Wall Street had expected $1.46 billion, according to Thomson Reuters. The company attributed the rise in part to the success of "Overwatch," released in late May.

Adjusted per-share profit rose to 54 cents from a profit of 13 cents a year ago. Analysts had expected an adjusted 42 cents a share.

Activision Blizzard also raised its outlook for the fiscal year. It now expects revenue of about $6.4 billion and profit of about $1.83 a share, after adjusting to account for factors including deferred sales of online services.

The company, which didn't put out a major release a year ago, benefited from the industry's shift to digital downloads and away from games printed on disks. Newly acquired King Digital Entertainment also contributed to adjusted revenue in the quarter, though the "Candy Crush Saga" developer's monthly active users fell 13% to 409 million from the first quarter, which it blamed on seasonal trends and launch timing.

Shares of Activision Blizzard, which had gained nearly 60% over the past year, rose 1.4% in after-hours trading to $41.40.

Activision Blizzard, focused on building its new division dedicated to so-called e-sports, said viewership of competitions in the first half of the year involving its popular "Call of Duty" franchise increased sharply. The company in June began publishing live e-sports programming on Facebook Inc. through Major League Gaming, a producer and broadcaster of videogame competitions it acquired December.

Meanwhile, smaller competitor Take-Two Software Interactive Inc. said its fiscal-first-quarter revenue adjusted for deferred sales fell 26% from a year earlier to $272.6 million. Analysts had expected adjusted revenue of $259.42 million, according to Thomson Reuters. It also reported an adjusted loss of 34 cents a share, compared with a profit of 31 cents a year ago. Analysts had expected an adjusted loss of 30 cents a share.

Take-Two shares, up nearly 30% over the past year through Thursday's close, rose more than 3% after hours.

Take-Two said it benefited a year ago from the launch of the personal-computer version of "Grand Theft Auto V," the latest game in its best-known series. Take-Two also put out a team-based game in May with a cast of superhero characters, called "Battleborn." But in an interview, Chief Executive Strauss Zelnick said "Battleborn" wasn't a big hit. "The performance has been below our expectations," he said.

Thursday's results come after Electronic Arts Inc. this week reported a decline in adjusted quarterly revenue and profit.

Videogame companies and many analysts who cover them prefer adjusted measures, which take into account revenue earned up front from the sale of online-enabled games sold in a period. U.S. accounting rules, though, require the companies to defer revenue from online-enabled games for however long they think players will use those services -- typically six to nine months. The game companies are now starting to shift away from reporting the adjusted figures in response to stricter guidelines issued by Securities and Exchange Commission over the use of metrics that don't comply with generally accepted accounting principles, or GAAP.

On a GAAP basis, Activision Blizzard said net income fell to $127 million from $212 million a year ago. Revenue rose to $1.57 billion from $1.04 billion -- measures that included sales deferred from previous periods, and excluded deferred revenue from the latest quarter.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

August 05, 2016 02:48 ET (06:48 GMT)

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