Activision Blizzard, Inc. (NASDAQ:ATVI) released the earnings results from its third quarter after closing bell tonight, posting earnings of 23 cents per share on $1.17 billion in revenue Analysts had been expecting the game maker to report earnings of 13 cents per share on $1 billion in revenue.
Key metrics from Activision Blizzard’s earnings report
GAAP net revenues were $753 million for the quarter, compared to $691 million in last year’s third quarter. In the third quarter of 2013, the company reported non-GAAP revenue of $657 million. GAAP net revenues from digital channels made up 67% of Activision’s total revenues. Non-GAAP net revenues from digital channels made up 43% of total revenues.
Michael Mauboussin: Here’s what active managers can do
The company reported a GAAP loss per share of 3 cents, compared to GAAP earnings of 5 cents per share in last year’s third quarter. Non-GAAP earnings were 8 cents per share last year, compared to this year’s 23 cents.
Activision Blizzard management reported that Destiny, Diablo III, Hearthstone: Heroes of Warcraft and World of Warcraft drove the company’s strong results. Destiny set a new record for the launch of a video game franchise, ranking among the top ten biggest video game launches ever in the U.S. The game has over 9.5 million registered users who play the game, on average, more than three hours a day. The company now has more than 20 million registered players for Hearthstone and 7.4 million subscribers for World of Warcraft as players await the Warlords of Draenor expansion.
Activision Blizzard increases guidance
The company increased their full year non-GAAP guidance and now expects to see revenue grow by double digits year over year and set a new record for earnings per share. Activision Blizzard’s previous non-GAAP net revenue was $4.7 billion. It moves to $4.8 billion. The company’s GAAP net revenue projection moves from $4.24 billion to $4.325 billion. Management kept its 91 cent per share guidance for GAAP earnings for the full year the same but raised its non-GAAP guidance from $1.29 to $1.35 per share.
For the fourth quarter, Activision Blizzard’s estimates remain the same, with non-GAAP revenue expected to be $2.2 billion and GAAP revenue expected to be $1.492 billion. The company still expects non-GAAP earnings of 86 cents per share and GAAP earnings of 28 cents per share for the fourth quarter.