Activision Blizzard (ATVI) Shares Tumble on Weak Forecast; Q4 Results Beat

February 9, 2011 4:36 PM EST
Activision Blizzard, Inc. (Nasdaq: ATVI) shares are dropping in extended trade on Wednesday despite the company's fourth-quarter beat, as the company's forecast misses the mark.

The video game developer behind the popular "Call of Duty" series reported fourth-quarter earnings of 53 cents per share, excluding one-time items, 2 cents better than the analyst estimate of 51 cents per share.

Revenue for the company rose slightly to $2.55 billion in the period from $2.50 billion last year, easily beating the market consensus of $2.35 billion.

"We benefited from new content releases for two of the world’s most successful online entertainment franchises," Robert Kotick, CEO of Activision Blizzard, stated. "During the year, we grew our net revenues, delivered record earnings, achieved record GAAP and non-GAAP operating margins of 11 percent and 29 percent, respectively, and generated $1.4 billion in operating cash flow.”

Looking forward, Activision sees first-quarter earnings of 7 cents per share on sales of $640 million, below the Street's forecast of 10 cents per share and $735 million.

For the full year 2011, the company sees earnings of 70 cents per share on sales of $3.9 billion, also below the estimate of 83 cents per share and sales of $4.69 billion.

The company also announced a new $1.5 billion share buyback program.

Shares of Activision are down 6.76 percent to $10.90 in aftermarket movement on Wednesday.

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