Activision third-quarter forecast disappoints; shares fall
(Reuters) - Videogame maker Activision Blizzard Inc's (NASDAQ: ATVI) current-quarter forecast for profit and revenue fell short of estimates on Thursday, overshadowing better-than-expected second-quarter results, sending shares down 3.7%.
Activision forecast third-quarter adjusted revenue of $1.10 billion and profit of 20 cents per share, below average analyst estimate of $1.36 billion and 40 cents per share.
The company, which labeled 2019 a "transition year" in May, cut 800 jobs during second quarter and spent heavily on developing its key game franchises "Call of Duty", "Candy Crush", "Overwatch", "Warcraft", "Hearthstone" and "Diablo".
Activision said in February the number of developers working on its games will increase by about 20% over the course of 2019.
"Beginning in the second half of this year our audiences will have a chance to see and experience the initial results of these efforts," Chief Executive Officer Bobby Kotick said in a statement.
Activision raised its full-year forecast for adjusted profit to $2.15 per share from $2.10 and reaffirmed revenue expectation of $6.30 billion. Analysts were expecting a profit of $2.15 per share and revenue of $6.36 billion, according to IBES data from Refinitiv.
The company's earnings follow upbeat results from rival publishers like Take-Two Interactive Software Inc (NASDAQ: TTWO) and Electronic Arts Inc (NASDAQ: EA).
Take-Two raised its full-year revenue forecast on Monday, boosted by the success of its franchises "NBA 2K", "Grand Theft Auto V" and "Red Dead Redemption 2", while EA beat revenue estimates last week, riding on the success of its battle royale game "Apex Legends".
Activision's net income fell to $328 million, or 43 cents per share, in the quarter ended June 30, from $402 million, or 52 cents per share, a year earlier.
Excluding items, the company earned 38 cents per share.
Total adjusted revenue of $1.21 billion beat estimates of $1.19 billion.
(Reporting by Sayanti Chakraborty in Bengaluru; Editing by Shinjini Ganguli and Arun Koyyur)