Activision Blizzard Inc., the video game publisher behind the massive Call of Duty and World of Warcraft franchises, beat Wall Street expectations in the second quarter thanks to increasing returns from online gameplay.
Activision reported earnings of $759 million in the quarter ended June 30, a gain of 15 percent from $658 million reported a year ago. That amounted to earnings per share of 13 cents, besting analysts’ predictions by 5 cents a share, according to reports. Twelve months ago, shareholders enjoyed earnings of 6 cents a share.
Activision’s stock price closed at $25.67 on the Nasdaq Tuesday before the announcement, but shares were up by more than 6 percent in after-hours trading following the news.
Because many of its games are now sold online and new enhancements are made available for purchase year round, Activision is making more money from digital channels than ever before. In January, the company launched an online version of Call of Duty in China, which also boosted profits.
“Our audience size and the total amount of time people spend with our franchises continue to grow,” said Activision Chief Executive Bobby Kotick, in a statement. “In the second quarter, our monthly active users grew by 35 percent year-over-year, and the time our communities spent playing our games grew by 25 percent year-over-year.”
Disney Films Lift Earnings
Walt Disney Co. had a mixed third quarter with a strong performance in feature films but only single-digit growth in the media networks and theme park businesses.
The Burbank entertainment and media giant reported net income of $2.5 billion ($1.45 a share) for the quarter ended June 27, compared with net income of $2.2 billion ($1.28) in the same period a year earlier. Revenue increased 5 percent to $13.1 billion.
Analysts on average expected net income of $1.42 a share on revenue of $13.2 billion, according to Thomson Financial Network.
The $1.4 billion global box office of “The Avengers: Age of Ultron” and the continuing performance of the live-action “Cinderella” contributed to the filmed entertainment business having revenue of $2 billion, a 13 percent increase from the prior year. It was the only business segment to have double-digit growth.
Broadcasting and cable media saw a 5 percent increase in revenue to $5.8 billion while the theme parks and resorts had a 4 percent increase to $4.1 billion as domestic park attendance and spending grew but was offset by lower attendance at Hong Kong Disneyland and higher operating costs in Hong Kong and Paris.
Licensing revenue from merchandise related to animated blockbuster “Frozen” and the Avengers and Star Wars franchises contributed to a 6 percent increase in revenue in the consumer products segment.
Disney reported earnings after markets closed Tuesday. Shares ended the day at $121.69, but dipped 6 percent in after-hours trading to $113.80 following the announcement.
DreamWorks Loss Widens
DreamWorks Animation SKG Inc. had a wider net loss than anticipated in the second quarter, but beat analyst expectations for revenue.
The Glendale animation studio posted a net loss of $38.6 million (-45 cents a share) for the quarter ended June 30, compared with a net loss of $16 million (-18 cents) in the same period a year earlier. Revenue increased 40 percent to $171 million.
Analysts on average expected a net loss of 26 cents on revenue of $167 million, according to Thomson Financial Network.
The feature film business brought in $87.8 million in the second quarter, an increase of 26 percent from the $69.7 million from a year ago.
Revenue from the television business was $54.5 million in the second quarter compared with $20 million in the same period a year earlier. The increase was attributed to a higher number of episodes aired under licensing arrangements. DreamWorks currently has seven series on Nickelodeon and Netflix and will debut another seven by the end of the year.
The company reported earnings after markets closed Tuesday. Shares ended the day at $23.98, but dipped 5 percent in after-hours trading to $22.75 following the announcement.
