August 2, 2018 / 8:16 PM / 2 years ago

Activision Blizzard's quarterly profit beats on "Call of Duty" strength

Aug 2 (Reuters) - Activision Blizzard Inc topped Wall Street’s quarterly profit expectations on Thursday, driven by sales of its blockbuster videogame, “Call of Duty”, but forecast current-quarter and full-year revenue below estimates.

The videogame publisher’s net income jumped to $402 million, or 52 cents per share, in the second quarter, from $243 million or 32 cents per share, a year earlier.

Excluding items, the company earned 41 cents per share, beating the average analyst estimate of 35 cents.

The company, which is behind popular franchises such as “Destiny” and “Skylanders”, said total adjusted revenue fell to $1.39 billion from $1.42 billion in the second quarter ended June 30.

Analysts on average had expected $1.38 billion, according to Thomson Reuters I/B/E/S.

Activision said it expected third-quarter adjusted revenue of $1.62 billion and profit of 47 cents per share, below analysts’ average estimate of $1.87 billion and 66 cents per share.

The company forecast 2018 adjusted profit of $2.58 per share and revenue of $7.48 billion, while the Street was expecting a profit of $2.60 per share and revenue of $7.52 billion.

U.S. videogame producers are known to typically give outlook below market expectations but almost always beat them.

Rival Electronic Arts Inc last week forecast tepid second-quarter revenue growth, due to the timing of its recognition of bookings in Asia as well as negative foreign exchange impact.

The results come in the backdrop of the success of games from the “battle royale” genre such as “Fortnite” and “PlayerUnknown’s Battlegrounds”.

Epic Games launched the free-to-play “battle royale” mode for Fortnite on computers and gaming consoles in September. The mode allows up to 100 online players to battle each other until only one player survives.

The game has 125 million players, according to a blog post here by Epic Games in June.

Activision reported a 6.3 percent fall in revenue from its dominant high-margin digital business to $1.20 billion. It comprised about 77 percent of its total revenue.

Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila

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