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Activision Blizzard
Strong results from World of Warcraft and Call of Duty titles weren’t enough to push
Activision Blizzard
stock higher as the videogame company disclosed its earnings.
It was as if Wall Street knew the games were doing well.
Activision stock (ticker: ATVI) was down 2.5% to $53.20 after the market closed Thursday, adding to a loss of 3.2% in regular trading hours.
The company’s third-quarter reported adjusted revenue, or net bookings, came in at $1.21 billion, beating estimates calling for $1.17 billion. But management’s forecast that net bookings will be $2.65 billion for the fourth quarter was short of what analysts have anticipated.
The company said World of Warcraft: Classic drove the biggest quarterly growth in subscriptions in the franchise’s history. Call of Duty: Black Ops 4’s reach and net bookings from in-game items such as lootboxes also performed far better than its predecessor in the third quarter.
Since Barron’s noted in August that Call of Duty and World of Warcraft could push the shares higher, several analysts upgraded the stock and raised their estimates. The stock had gained about 8% from Aug. 30 through Thursday’s close.
“Recent launches have enabled significant growth in the size of our audiences for our Call of Duty and World of Warcraft franchises,” CEO Bobby Kotick said in the earnings release.
Kotick said management believes that as the company introduces more free-to-play titles based on popular franchises, Activision can increase the size of its audience and improve engagement and monetization across its franchises.
“With a strong content pipeline and momentum in mobile, esports and advertising, we are confident we will remain a leader in connecting and engaging the world through epic entertainment,” he added.
The company said 100 million people downloaded Call of Duty Mobile in its first week. Its Call of Duty: Modern Warfare title was launched in the fourth quarter, and sales set a record last week.
Write to Connor Smith at connor.smith@barrons.com
