Call of Duty drives Activision’s Q1 earnings to record high

Video game developer Activision Blizzard (ATVI) said today its first-quarter earnings and revenues hit an all-time high helped by strong performance of Call of Duty, its blockbuster game franchise. The results contrasted with market speculations that the company is losing audience to the growing popularity of Epic Games’ multiplayer survival game Fortnite.

Activision’s adjusted earnings rose 8% annually to $0.78 per share, far exceeding expectations. At $0.65 per share, reported earnings were 16% higher compared to last year.

Driving the bottom-line growth, revenues climbed 14% to $1.97 billion. Digital online channels, which account for nearly two thirds of the company’s revenues, expanded 6% to $1.46 billion, while retail channel revenues surged 51% to $409 million. Operating cash flow jumped 29% to $529 million, hitting an all-time high.

“Our continued ability to set new records speaks to the quality of our teams and the breadth and enduring nature of our portfolio of franchises against the backdrop of a large and growing interactive market.  As we look ahead, our innovative core gaming pipeline, as well as initiatives like mobile, esports, and advertising, will continue to drive growth for our business,” said Activision CEO Bobby Kotick.

Net booking, which refers to the volume of products and services sold, moved up 15% to $1.38 billion, with both the King and Blizzard segments registering robust growth. At the end of the quarter, the Santa Monica, California-based company had 374 million monthly active users, led by its popular first-person shooting game Call of Duty.

Buoyed by the upbeat results, the company slightly upgraded its full-year 2018 revenue outlook to $7.36 billion, and adjusted earnings guidance to $2.46 per share. Reported earnings for the year are currently estimated to be $1.79 per share. For the second quarter, Activision is currently looking for revenues of $1.56 billion, and adjusted earnings of $0.46 per share. The revised forecast for reported earnings is $0.26 per share.

Trading in Activision shares was briefly halted Thursday afternoon after Dow Jones inadvertently published the earnings results before the official announcement. Consequently, the company released the results ahead on schedule, while the stock resumed trading. The stock, which lost over 15% since mid-March, witnessed some volatility in the later part of the session and ended trading down 2.30%.

Among Activision’s competitors, Electronic Arts (EA) is scheduled to release its fourth-quarter results on May 8, while Take-Two Interactive (TTWO) will be publishing results on May 16.