Fueled by ‘Call of Duty,’ Activision expected to post solid 4th-quarter earnings
By APWednesday, February 10, 2010
Ahead of the Bell: Activision Blizzard results
NEW YORK — Activision Blizzard Inc.’s fourth-quarter results, expected after the market closes Wednesday, should show whether stellar sales of “Call of Duty: Modern Warfare 2″ were enough to make up for weaker demand for other games.
Analysts polled by Thomson Reuters expect a profit of 43 cents per share on sales of $2.23 billion.
Signal Hill analyst Todd Greenwald expects Activision to surpass Wall Street’s fourth-quarter estimates, driven by the “well-documented success of ‘Modern Warfare 2,’ offset by weak sales of ‘DJ Hero,’ ‘Tony Hawk,’ and ‘Guitar Hero.’”
But he is also predicting a conservative outlook, given the “difficult environment” for both the video game industry and video game stocks.
“In addition, Activision Blizzard is likely looking at a fairly back-end loaded year, with most of its key releases not starting to hit until June at the earliest,” he added.
Mike Hickey at Janco Partners said while he is only expecting “marginal sales growth” in 2010, he also anticipates strong earnings growth as Activision’s product sales mix comes to “aggressively favor their exceedingly high operating margin Blizzard business.” Blizzard is responsible for “World of Warcraft” and the upcoming “StarCraft 2.”
