Activision Blizzard (ATVI) reported a 38% jump in earnings for the third quarter helped by lower costs and expenses as well as income tax benefit despite a decline in revenue. However, the results missed analysts’ expectations and the company guided fourth-quarter earnings way below the consensus estimates. Following this, the stock plunged over 8% in the after-market session.
Net income for the quarter climbed 38.2% to $260 million and earnings jumped 36% to $0.34 per share. Non-GAAP earnings decreased 10.6% to $0.42 per share.
Net revenue fell 6.6% to $1.51 billion. Revenues from digital channels were $1.28 billion. The company posted net bookings of $1.66 billion for the quarter, lower by 12.6% compared to last year.
Looking ahead into the fourth quarter, the company expects adjusted earnings of $0.64 per share and revenues of $2.236 billion. For the full year 2018, the adjusted earnings and revenue forecast is maintained at $2.46 per share and $7.355 billion, respectively. Net bookings are expected to be $7.48 billion for 2018 and $3.05 billion for the fourth quarter.
Over the last three months, Activision launched Call of Duty: Black Ops 4, Blizzard released World of Warcraft: Battle for Azeroth and King launched Candy Crush Friends Saga for its global franchises. Activision Blizzard had 345 million monthly active users (MAU) in the quarter.
King had 262 million MAU in the quarter and Candy Crush Saga MAU grew year-over-year. Blizzard had 37 million MAU in the quarter. World of Warcraft: Battle for Azeroth set a new day-one franchise record with more than 3.4 million units sold-through.
Activision had 46 million MAU in the quarter. Destiny MAU grew year-over-year, driven by the launch of Forsaken and reach initiatives for the base game. Activision MAU increased significantly in October following the launch of Call of Duty: Black Ops 4.
Among competitors, Electronic Arts (EA) reported impressive results for its second quarter, when both earnings and revenues exceeded analysts’ expectations.
Shares of Activision Blizzard ended Thursday’s regular session down 3.53% at $62.79 on the Nasdaq. The stock has fallen 0.84% in the year so far and over 2% in the past year.