Activision Blizzard's Earnings Surpass Expectations Despite Loss of Subscribers for 'World of Warcraft'
Activision Blizzard bested the expectations of Wall Street in the fourth quarter on strong sales of Call of Duty: Modern Warfare 3 and the hot new video game for children, Skylanders: Spyro's Adventure.
The company, which reported earnings after the closing bell on Thursday, also impressed analysts by losing only 100,000 World of Warcraft subscribers after shedding seven times that in the third quarter. At 10.2 million subscribers, the title remains the most popular massively multiplayer online role-playing game in the country.
Revenue in the fourth quarter dipped less than 1 percent to $1.41 billion while the company posted net income of $99 million, reversing a year-ago loss of $233 million.
Activision Blizzard boasted that Modern Warfare 3 was the best-selling game last year. Previously, the company announced the game had garnered $1 billion in sales in its first 16 days of release, arriving at that milestone one day quicker than the movie Avatar.
Chief Executive Bobby Kotick, though, told The Hollywood Reporter on Thursday that the launch last year of Skylanders -- a sort of hybrid between a traditional toy and a console video game -- was even bigger than the first Call of Duty in 2003. Skylanders, including the sale of 20 million toys, generated revenue of $200 million in 2011.
"If it was just a standalone toy, it would be one of the biggest toy launches in history," Kotick said.
Coming this year, Kotick said, is Skylanders Giants and a new Call of Duty game, as well as Diablo III.
For the year, Activision Blizzard said it earned 92 cents per share, a record for the company, which also said it would boost its cash dividend 9 percent to 18 cents a share. It also announced a new $1 billion stock repurchase program.
Shares of Activision Blizzard rose 1 percent Thursday to $12.66 and climbed another 1 percent after the closing bell.