Activision Blizzard Inc. on Wednesday reported declining profits and revenue for the third quarter, but the results were better than expected, prompting the Santa Monica video game company to raise its full-year outlook.

The "Call of Duty" publisher reported third quarter net income of $56 million (5 cents per share), down from $226 million (20 cents) during the same period last year. Third quarter revenue fell 18 percent to $691 million .

Results surpassed Wall Street's estimates of 4 cents per share and $594 million in revenue, according to Bloomberg.

"Robust continued engagement with our core franchises drove digital revenue, which constituted a majority of all revenue," Chief Executive Bobby Kotick said in a statement. "This quarter demonstrates that games like 'Call of Duty' and 'World of Warcraft' engage and entertain our fans year round."

Based on the strong quarter, Activision, which is fresh from completing a $8.2 billion deal to buy back most of its shares from French media giant Vivendi, raised its full year outlook. The company estimates earnings per share of 83 cents and revenue of $4.32 billion.

Also on Wednesday, Activision announced that the latest installment of its first-person shooter franchise "Call of Duty" sold more than $1 billion in its first day on retail store shelves.

"Call of Duty: Ghosts," which hit stores Tuesday, is currently the most-played game on Xbox Live, according to Microsoft.

The company's stock was down 42 cents, or more than 2 percent, to $16.11 in after-hours trading on the Nasdaq.