Activision Blizzard's Stock Drops After Disappointing Profit, Sales Outlook
Activision Blizzard's stock tumbled 7.2% in after-hours trade Thursday, after the video game maker reported a better-than-expected fourth-quarter profit, but a first-quarter outlook that was well below forecasts. For the quarter ended in December, net earnings rose to $361 million, or 49 cents a share, from 174 million, or 23 cents a share, a year earlier. Excluding non-recurring items, adjusted earnings per share were 94 cents, above the FactSet consensus estimate of 88 cents. Adjusted revenue slipped to $2.21 billion from $2.27 billion, compared with analyst forecasts of $2.24 billion. For the current quarter, the company expects adjusted EPS of 5 cents and revenue of $640 million, below analyst projections of 18 cents and $775 million, respectively. The company said because of the significant weakening of foreign currencies against the U.S. dollar, international revenue and earnings are expected to be translated at "much lower rates" than in 2014. Separately, Activision announced a new two-year, $750 million stock repurchase program. The stock, has gained 8.3% so far this year through Thursday's close, while the S&P 500 has edged up 0.2%.
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