Activision Blizzard (NASDAQ: ATVI
) is scheduled to release third quarter earnings after the market close on Thursday, November 5, 2009. Analysts, on average, currently expect the company to report earnings of 4 cents a share on revenue of $726.14 million. In the year ago quarter, the company reported a net loss of 8 cents per share on revenue of $711 billion.
Activision Blizzard, Inc. publishes online, personal computer, console, and hand-held games worldwide. The company develops and publishes video games, as well as maintains its proprietary online-game related service, Battle.net. It also publishes interactive software products and peripherals internationally.
The Santa Monica, California-based Activision Blizzard posted second quarter net income of $195 million or 15 cents per share, compared to $28 million or 5 cents per share, in the year-ago quarter. Quarterly revenue totaled $1.04 billion. Analysts, on average, expected the company to earn 7 cents per share on revenue of $800.8 million.
Activision Blizzard expects to report third quarter net revenue in the range of $680 million, and net loss of $0.03 per share. Excluding deferred revenue and items, the company expects to earn 3 cents a share on revenue of $700.
The company saw a couple of strong releases during the third quarter, including the shooter title "Wolfenstein" and "Marvel Ultimate Alliance 2," the latter of which ranked in the top-10 selling game titles for the month of September, according to NPD data.
The much anticipated Guitar Hero 5 too was released but it failed to impress amid faltering demand for music-game genre. According to industry research firm NPD Group's September US sales report, Guitar Hero 5 finished behind MTV Games' The Beatles: Rock Band, selling just 499,000 units for the 360, PS3, PlayStation 2, and Wii.
The company's rolling out a suite of new games during the holiday season that it hopes will boost its sales, including DJ Hero, Band Hero, Tony Hawk: RIDE and Bakugan Battle Brawlers. Activision's November launch of "Call of Duty: Modern Warfare 2," is being seen as the biggest release on the calendar.
Activision expects the new titles to boost its results. The company in August hiked its annual earnings outlook to 26 cents per share from 24 cents per share.
However, the company has delayed the expected release dates for two games, Singularity and StarCraft II to 2010. As a result of moving the anticipated releases of these games and lower market expectations, Activision Blizzard in August adjusted its fiscal year 2009 outlook for GAAP net revenues from $4.3 billion to $4.05 billion.
Video game industry suffered a major blow early this year as a severe economic recession cut the demand for video games. According to data from the NPD Group, game software sales in the U.S. were down 12% by the end of September compared to the same period last year. However, there are signs of improvement in the sector. Sales of video game software grew 5% during the month of September, reversing a consecutive six-month decline in game sales.
Moreover, recent industry hardware price cuts are expected to accelerate console sales, which should improve video game sales. Console makers Sony (NYSE: SNE
), Microsoft (NASDAQ: MSFT
), and Nintendo all slashed the prices of their systems by $50 to $100 in Q309.
Among other developments, early this month, chinese regulator General Administration of Press and Publication recently ordered local online game firm NetEase.com not to operate the latest version of Activision Blizzard's World of Warcraft, due to "gross violations" of regulations.
In terms of stock performance, Activision shares are up almost 31% since the beginning of the year. Shares of the company fell 95 cents or 0.89% to close at $10.71 in afternoon trade on Tuesday.Disclosure: Author doesn't own any of the stocks discussed here.