SANTA MONICA (dpa-AFX) - Video game publisher Activision Blizzard Inc (ATVI) on Tuesday reported an increase in second-quarter profit, driven by strong growth in digital channels, penetration in China and improved operating margin. Its quarterly results surpassed Wall Street estimates.
The company lifted the guidance for 2015, hoping its iconic games such as 'Call of Duty' and 'Skylanders' would continue to attract users.
Following the strong quarterly results and the raised guidance, Activision shares touched a new high in a year, gaining more than 6% at $27.25 in after-hours trade on the Nasdaq.
Activision, based in Santa Monica, California, posted quarterly net earnings of $212 million or $0.29 per share, compared with $204 million or $0.28 per share last year.
Excluding items, adjusted earnings for the quarter were $0.13 per share, compared with $0.06 per share a year ago.
On average, 20 analysts polled by Thomson Reuters estimated earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
The company's total revenues for the quarter rose 8 percent to $1.04 billion from $970 million in the prior year.
Adjusted revenues for the quarter climbed 15 percent to $759 million from $658 million a year ago. Twenty analysts had a consensus revenue estimate of $665.5 million.
Activision has benefited from its increased focus on digital online content. In the second quarter, its adjusted revenue from digital online channels rose 27 percent from a year ago, while adjusted revenue from retail channels slid 22 percent.
CEO Kotick noted that the company's monthly active users surged 35 percent from a year ago, and the time communities spent playing its games increased 25 percent.
The company also benefited from growth in China, driven by the popularity of 'Diablo III', 'Hearthstone: Heroes of Warcraft', and 'Heroes of the Storm.'
Activision benefited from operating margin that improved to 22.8 percent from 17.2 percent last year.
For the third quarter, Activision expects adjusted earnings of $0.14 per share on adjusted revenues of $930 million. Analysts expect earnings of $0.14 per share on revenues of $873 million.
For calendar year 2015, the company now expects adjusted earnings of $1.30 per share on adjusted revenues of $4.46 billion. Earlier, it estimated earnings of $1.20 per share on revenues of $4.43 billion.
Analysts expect earnings of $1.23 per share on revenues of $4.47 billion for 2015.
ATVI closed Tuesday at $25.67, up $0.15 or 0.59%, on a volume of 8.4 million shares on the Nasdaq. In after hours, the stock gained $1.58 or 6.16% at $27.25. In the past year, the stock has traded in the range of $17.73 - $26.45.
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