Activision Blizzard shares fall more than 10% after light prospects, game delays

Activision Blizzard Inc. shares fell in the extended session Tuesday, after the video game publisher’s easier-than-expected outlook and expected delay of two games overshadowed earnings and commitment to a safe and fair working environment.

After initially rising about 4% in after-hours trading immediately after the results, Activision Blizzard ATVI,
-2.12%
shares fell more than 10% during the earnings call. Shares fell 2.1% to close the $ 77.67 ordinary session to give Activision Blizzard a market capitalization of $ 60.4 billion.

The company said it expects fourth-quarter adjusted earnings of 62 cents per share on revenue of $ 2.02 billion and bookings of $ 2.78 billion. The company also raised its full-year forecast to earnings of $ 3.70 per share. share of $ 8.66 billion revenue and $ 8.65 billion bookings compared to the quarterly forecast of $ 3.54 per share of $ 8.52 billion revenue and $ 8.65 billion bookings for the year . .

However, analysts estimated earnings of $ 1.38 per share on revenue of $ 2.91 billion and bookings of $ 2.89 billion for the fourth quarter and earnings of $ 3.83 per share on revenue of $ 8.79 billion dollars and bookings of $ 8.76 billion for the year.

Activision Blizzard CFO Armin Zerza said in response to the call: “We remain cautious about our fourth quarter revenue assumption and in terms of costs we have decided to further increase investment in mobile marketing given the strong returns we are currently seeing , and compliance with the rules of organization. “

For the fourth quarter, Activision Blizzard said it will roll out “Call of Duty: Vanguard” on Friday, and the franchise’s “Warzone Pacific” update on December 5th. Other expected titles, however, will be delayed.

“While we still plan to deliver a significant amount of content from Blizzard next year, we are now planning a later launch of ‘Overwatch 2’ and ‘Diablo IV’ than originally anticipated,” Daniel Alegre, the company’s chief operating officer, said on the call. “These are two of the most anticipated titles in the industry, and our teams have made great strides toward completion in recent quarters.”

Delays in releases have become more common as publishers seek to avoid releasing games that may still be faulty, especially since CD Projekt SA’s CDR,
-0.26%
long-awaited and long-awaited release last year of “Cyberpunk 2077”, which forced distributors like Sony Group Corp. 6758,
+0.22%
to offer full refund.

The company reported third-quarter net income of $ 639 million, or 82 cents per share. per share, compared to $ 604 million, or 78 cents per share. share, in the same period the year before. Activision said adjusted earnings, which exclude stock-based compensation expenses and other items, rose 89 cents per share. share from 88 cents per. share in the same period the year before.

Revenue rose to $ 2.07 billion from $ 1.95 billion in the quarter last year, while bookings rose to $ 1.88 billion from $ 1.77 billion last year. Bookings represent the value of digital products and services sold during a quarter, but part of the revenue from these purchases is often recognized in future quarters.

Analysts surveyed by FactSet had predicted 70 cents per share on a turnover of 1.88 billion dollars and bookings of 1.87 billion dollars, based on the company’s forecast of 75 cents per share on a turnover of 1.97 billion dollars and bookings of 1 , $ 85 billion.

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At the conference call, Bobby Kotick, Activision Blizzard’s CEO, acknowledged that the company has fired more than 20 employees related to allegations of sexual harassment and discrimination over the past quarter, and that it waives arbitration claims for future harassment and discrimination claims. Kotick also said the company plans to increase the number of women and non-binary employees by 50% within the next five years, making up about a third of the workforce.

“Right now, workplace leadership is my focus,” Bobby Kotick, Activision Blizzard’s CEO, said during the call. “Our growth opportunities, which we have talked about, have never been better, but we will not be able to realize all that growth potential without talent. And in order to retain and attract the talent we need, we must, of course, be recognized as the very best place to work. That means we have to be the best welcoming inclusive environment. ”

Kotick also noted that a 2020 review of profitability from an outside firm showed that “women on average earned slightly more than men for comparable work in 2020,” and that Activision Blizzard was committed to fair pay.

Activision Blizzard releases such games as “Call of Duty” through its Activision brand; “World of Warcraft”, “Overwatch” and “Diablo” through its Blizzard label and “Candy Crush” through its King label. Last week, Activision Blizzard announced that it had acquired Barcelona-based mobile game developer Digital Legends at an undisclosed price.

Take-Two Interactive Inc. TTWO,
+0.08%,
Electronic Arts Inc. EA,
-1.13%,
and Playtika Holding Corp. PLTK,
-0.54%
is scheduled to report earnings on Wednesday.

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