Activision Blizzard Q1 Profit Tops View - Update

(RTTNews) - Activision Blizzard Inc. (ATVI) on Thursday reported a drop in profit for the first quarter, hurt by charges related to acquisition of King Digital Entertainment.

Nevertheless, the video game publisher's profit and revenues trumped Wall Street estimates. Moving ahead, the company detailed a strong outlook for second quarter and lifted its full-year 2016 forecast.

Santa Monica, California-based Activision's first-quarter profit dropped to $336 million or $0.45 per share from $394 million or $0.53 per share a year ago.

Adjusted earnings for the quarter rose to $0.23 per share from $0.16 per share last year. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.

Activision, developers of the popular "Call of Duty" and "Warcraft" franchises, said first-quarter revenues rose to $1.46 billion from $1.28 billion last year. Adjusted revenues increased to $908 million from $703 million. Analysts had a consensus revenue estimate of $812.12 million.

The company has started expanding its business from console-based gaming to games for mobile devices. In February, Activision completed the $5.9 billion acquisition of King Digital, the maker of "Candy Crush Saga." King contributed about 23 percent of adjusted revenue in the first quarter. Activision touted that it now has 544 million monthly active users.

Looking forward to the second quarter, Activision expects adjusted earnings of $0.38 per share and adjusted revenue of $1.38 billion. Analysts currently expect earnings of $0.34 per share and revenues of $1.33 billion.

For the full year, the company now expects adjusted earnings of $1.78 per share and adjusted revenues of $6.28 billion, up from prior forecast of earnings of $1.78 in per share and revenues of $6.25 billion. Wall Street currenlty expects full-year adjusted revenue of $6.29 billion and earnings of $1.79 per share.

ATVI closed Thursday's trading at $34.91, up $0.63 or 1.84%, on the Nasdaq. The stock further rose $1.34 or 3.84% in the after-hours trading.