Activision Blizzard (NASDAQ: ATVI) reported an 11% drop in earnings for the first quarter of 2019 due to a decline in net revenue as well as higher income tax expenses. However, the results exceeded analysts’ expectations. The company guided second-quarter earnings and revenue in line with the consensus estimates.
Net income fell by 10.6% to $447 million and earnings dropped by 10.8% to $0.58 per share. Adjusted earnings remained unchanged from the last year at $0.78 per share.
Net revenue decreased by 7% to $1.83 billion. Revenues from digital channels were $1.4 billion. The company posted net bookings of $1.26 billion for the quarter, down by 8.7% compared to last year.
Looking ahead into the second quarter of fiscal 2019, the company expects adjusted earnings of $0.35 per share and revenues of $1.315 billion. Bookings are predicted to be $1.15 billion for the second quarter.
For the full year 2019, the company had expected adjusted earnings of $1.85 per share and revenue of $6.025 billion. Bookings were expected to be lower at $6.30 billion compared to $7.26 billion recorded in 2018.
For the first quarter, Activision had 345 million monthly active users (MAU), with 41 million at Activision, 32 million at Blizzard, and 272 million at King. King MAUs were up sequentially for the second quarter in a row driven by the Candy Crush franchise where MAUs again grew quarter-over-quarter and year-over-year. Candy Crush Friends Saga continues to attract both former and new players to the franchise.
The daily time spent per user increased year-over-year for each of Activision, Blizzard, and King. Overall, the average time spent was about 50 minutes. Daily time spent per player across the Candy Crush franchise reached a new high, driving the King network to a record of 38 minutes.
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The company said it is increasing development for its biggest, internally-owned franchises, for both upfront releases and in-game content, as well as investing in platform expansion on PC and mobile and new geographies. Activision is also seeing strong momentum in its esports and in-game advertising initiatives.
The board of directors declared a cash dividend of $0.37 per common share, which represents a 9% increase from 2018. The dividend is payable on May 9, 2019, to shareholders of record at the close of business on March 28, 2019.
Mobile is emerging as the largest platform for gamers and it’s the fastest-growing among available gaming platforms. Activision plans to tap the potential and has announced its intention to bring all the existing games to mobile which would augur well for the firm in the near future.
Shares of Activision ended Thursday’s regular session up 2.04% at $49.55 on the Nasdaq. Following the earnings release, the stock inched down over 4% in the after-market session.
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