Activision Blizzard Inc. shares rose in the extended session Tuesday after the videogame publisher’s earnings beat and commitments to a safe and equitable work environment overcame a lighter-than-expected outlook.
Activision Blizzard
ATVI,
shares rose more than 3% after hours after an initial dip and a 2.1% decline to close the regular session at $77.67.
The company reported third-quarter net income of $639 million, or 82 cents a share, compared with $604 million, or 78 cents a share, in the year-ago period. Activision said adjusted earnings, which exclude share-based compensation expenses and other items, rose 89 cents a share from 88 cents a share in the year-ago period.
Revenue rose to $2.07 billion from $1.95 billion in the year-ago quarter, while bookings increased to $1.88 billion from $1.77 billion last year. Bookings represent the value of digital products and services sold during a quarter, but part of the revenue from those purchases is often recognized in future quarters.
Analysts surveyed by FactSet had forecast 70 cents a share on revenue of $1.88 billion and bookings of $1.87 billion, based on the company’s forecast of 75 cents a share on revenue of $1.97 billion and bookings of $1.85 billion.
Read: Videogame stocks are in the bargain bin, but earnings could mean new life
“I’m pleased to report strong third quarter results ahead of our prior outlook,” said Bobby Kotick, Activision Blizzard chief executive, in a statement. “We are excited about this week’s Call of Duty launch and expect continued success in the fourth quarter.”
Activision Blizzard publishes such games as “Call of Duty” through its Activision label; “World of Warcraft,” “Overwatch,” and “Diablo” through its Blizzard label, and “Candy Crush” through its King label. Last week, Activision Blizzard announced it had acquired Barcelona-based mobile game developer Digital Legends for an undisclosed price.
Activision Blizzard said it expects adjusted earnings of 62 cents a share on revenue of $2.02 billion and bookings of $2.78 billion for the fourth quarter. The company raised its full-year forecast to earnings of $3.70 a share on revenue of $8.66 billion and bookings of $8.65 billion, compared with its quarter-ago forecast of $3.54 a share on revenue of $8.52 billion and bookings of $8.65 billion for the year.
Analysts estimate earnings of $1.38 a share on revenue of $2.91 billion and bookings of $2.89 billion for the fourth quarter, and earnings of $3.83 a share on revenue of $8.79 billion and bookings of $8.76 billion for the year.
In a statement, the company acknowledged it fired more than 20 employees related to allegations of sexual harassment and discrimination over the past quarter, and that it is waiving arbitration requirements for future claims of harassment and discrimination. The company also said it plans to increase the number of women and non-binary employees by 50% within the next five years.
Activision Blizzard also said a 2020 review of pay equity from an outside firm showed that “women on average earned slightly more than men for comparable work in 2020,” and that it was committed to equitable pay.
Take-Two Interactive Inc.
TTWO,
Electronic Arts Inc.
EA,
and Playtika Holding Corp.
PLTK,
are scheduled to report earnings on Wednesday.
This post was originally published on Market Watch
