Strong dollar weighs on game maker Activision's forecast

Reuters News
|
Posted: Feb 05, 2015 4:27 PM

(Reuters) - Videogame maker Activision Blizzard Inc, known for its "Call of Duty", "Destiny" and "World of Warcraft" titles, forecast revenue for the first quarter below the average analyst expectation, factoring in the impact of a strengthening dollar.

Shares of Activision Blizzard, also known for its "Skylanders" and "Diablo" games, fell 7.8 percent in extended trading on Thursday.

The dollar had risen 15.6 percent in the six months through Wednesday. Activision earns about half of its revenue from outside the United States.

Activision forecast an adjusted profit of 5 cents per share and adjusted revenue of 640 million for the three months ending March.

Analysts on average were expecting a profit of 18 cents and revenue of $777.7 million, according to Thomson Reuters I/B/E/S.

Activision also launched a two-year share buyback plan of $750 million.

The company's adjusted revenue fell 2.6 percent to $2.27 billion for the fourth quarter ended Dec. 31. Net income rose to $361 million, or 49 cents per share, from $174 million, or 22 cents per share, a year earlier.

Adjusted for deferred revenue and other items, the company earned 94 cents per share, handily beating an expected 88 cents.

Activision's hit military-action game "Call of Duty: Advanced Warfare" was the top-selling console video game globally in 2014, while "Skylanders Trap Team" was the top-selling kids video game globally.

Sci-fi shooter game "Destiny" was the No.3 top-selling new release in North America and Europe in 2014 with more than 16 million registered users and active players playing an average of over three hours per day.

(Reporting by Abhirup Roy in Bengaluru; Editing by Joyjeet Das)