Activision raises full-year forecast, third quarter revenue tops estimates
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A crowd waits for a video presentation at the Activision booth during the 2014 Electronic Entertainment Expo, known as E3, in Los Angeles, California June 11, 2014. REUTERS/Jonathan Alcorn/File Photo
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By Anya George Tharakan
(Reuters) - Activision Blizzard Inc reported higher-than-expected revenue for the third quarter, boosted by the success of its "World of Warcraft: Legion" and "Overwatch" videogames as well as its acquisition of "Candy Crush" mobile game-maker King.
The company also raised its full-year adjusted profit and revenue forecasts.
Activision's total adjusted revenue, which includes deferred revenue, rose to $1.63 billion in the third quarter ended Sept. 30 from $1.04 billion a year earlier.
Analysts on average had expected revenue of $1.57 billion, according to Thomson Reuters I/B/E/S.
Revenue from the company's high-margin digital business more than doubled to $1.34 billion.
Activision raised its full-year adjusted revenue forecast to $6.53 billion from $6.48 billion, and its profit expectations to $2.02 per share from $1.90.
However, its forecasts for the key holiday-shopping quarter were slightly below analysts' estimates, amid expectations of heavy competition from games launched by rivals.
Activision forecast adjusted earnings of 74 cents per share and revenue of $2.38 billion for the quarter, which includes the latest installment of its "Call of Duty" franchise, "Call of Duty: Infinite Warfare", releasing on Friday.
Analysts on average were expecting a profit of 80 cents per share and sales of $2.48 billion.
The company could be conservative with its forecast due to its rivals' launches, Wedbush analyst Michael Pachter said in a pre-earnings note.
Pachter expects the latest "Call of Duty" game to be the year's most popular in a crowded holiday slate that includes Electronic Arts Inc's "Battlefield 1" and "Titanfall 2" shooters, as well as Ubisoft Entertainment SA's "Watch Dogs 2".
"Every holiday is very competitive, and this holiday will be no different," Dennis Durkin, Activision Blizzard CFO said in an interview.
"But we feel like we've got great momentum in our enduring franchises including Call of Duty and World of Warcraft, and early success in new franchises such as Blizzard's Overwatch," Durkin added.
Activision, which bought "Candy Crush" maker King Digital for nearly $6 billion in February, said King had 394 million monthly active users, down slightly from the preceding quarter.
(Reporting by Anya George Tharakan in Bengaluru; Editing by Savio D'Souza)
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