Activision Blizzard, Inc. (Nasdaq: ATVI) today announced better-than-expected financial results for the third quarter of 2010.
For the quarter ended September 30, 2010, Activision Blizzard’s GAAP net revenues were $745 million, as compared to its prior third-quarter outlook of $600 million. On a non-GAAP basis, the company’s net revenues were $857 million, as compared to its prior third-quarter outlook of $725 million. 
For the quarter ended September 30, 2010, Activision Blizzard’s GAAP earnings per diluted share were $0.04, as compared to its prior third-quarter outlook of break even GAAP earnings per share. On a non-GAAP basis, the company’s earnings per diluted share were $0.12, as compared to its prior third-quarter outlook of $0.08.
Robert Kotick, CEO of Activision Blizzard, stated, "For the third quarter, we exceeded our net revenues and earnings per share outlook and delivered strong year-over-year growth. Our better-than-expected results are due to our leadership in online entertainment, including strong performance from Activision Publishing’s Call of Duty franchise, and Blizzard Entertainment’s World of Warcraft and StarCraft II: Wings of Liberty. For the nine months ending September 30, 2010, our digital offerings contributed close to half of our total non-GAAP net revenues and our digital revenues have increased more than 15% over the prior year. Most importantly, we continue to deliver some of the world’s best games."
Kotick continued, "Activision Publishing is about to introduce what is likely to be the biggest entertainment launch of the year with Call of Duty: Black Ops, followed by Blizzard Entertainment’s World of Warcraft: Cataclysm, which we believe will deliver an incredible breadth of new content to the world’s largest massively multiplayer online role playing game (MMORPG) community. As a result of our over-performance, we are raising our calendar year 2010 net revenue and earnings outlook. We expect to deliver the most profitable year in our history with record operating margins."
Business Highlights
For the first nine months of the calendar year, Activision Publishing’s Call of Duty was the #1 third-party franchise in the U.S. and Europe, and Blizzard Entertainment’s StarCraft II: Wings of Liberty was the #1 PC title overall, according to The NPD Group, Charttrack and Gfk. Additionally, for the third quarter of the calendar year, Activision Blizzard was the #1 PC publisher in the U.S. and Europe, according to The NPD Group, Charttrack and Gfk.
Other highlights are as follows:
- During the third quarter of 2010, Call of Duty remained a top-10 franchise overall in the U.S. and Europe, according to The NPD Group, Charttrack and Gfk.
- On August 3, Blizzard Entertainment announced that StarCraft II: Wings of Liberty sold more than one million copies within the first 24 hours of its release, instantly making it the best-selling PC game of 2010, and more than 1.5 million copies within the first 48 hours of its release, making it the fastest-selling strategy game of all time.
- On August 31, Blizzard Entertainment and NetEase.com Inc. launched World of Warcraft: Wrath of the Lich King, the second expansion for Blizzard Entertainment’s award-winning subscription-based MMORPG, in mainland China.
- On September 1, Blizzard Entertainment announced that StarCraft II: Wings of Liberty sold more than three million copies worldwide in the first month of its release.
- On October 4, Blizzard Entertainment announced that World of Warcraft: Cataclysm, the highly anticipated third expansion for the world’s most popular subscription-based MMORPG, will be released on December 7.
- On October 5, Activision Publishing announced that Treyarch’s Call of Duty: Black Ops will be playable in stereoscopic 3D when the game launches at retail outlets worldwide on November 9.
- On October 7, Blizzard Entertainment announced that the subscriber base for World of Warcraft has exceeded 12 million players worldwide.
- As of September 30, Activision Blizzard had purchased approximately 55 million shares of its common stock, for approximately $600 million, under the $1 billion stock repurchase program authorized by its Board of Directors on February 10.
Additionally, on September 7, advertising industry veteran Eric Hirshberg joined Activision Publishing as Chief Executive Officer, to oversee operational management of the publishing division’s studio, product development and consumer marketing functions.
For the full year 2010, Activision Blizzard is raising its outlook for GAAP net revenues to $4.28 billion and GAAP earnings per diluted share to $0.51, as compared to its prior GAAP outlook of $4.18 billion in net revenues and $0.49 in earnings per diluted share. On a non-GAAP basis, the company now expects net revenues of $4.45 billion and $0.74 earnings per diluted share, as compared to its prior non-GAAP net revenue outlook of $4.4 billion and $0.72 in earnings per diluted share.
For the fourth quarter of 2010, Activision Blizzard expects GAAP net revenues of $1.26 billion, and a GAAP loss per share of $0.01. On a non-GAAP basis, the company expects net revenues of $2.2 billion and $0.47 earnings per diluted share for the fourth quarter.
Prev: 
Next: 
