Activision Blizzard Shoots Past Targets on 'Call of Duty' Sales

Activision Blizzard (ATVI) posted better-than-expected fourth-quarter results, thanks to strong holiday sales of Call of Duty: Modern Warfare 2 -- last year's best-selling video-game title. The Santa Monica, Calif.-based company also initiated a dividend and announced a $1 billion share repurchase program. In after-hours trading, the company's shares were up about 7% to around $10.80.For the three months ended Dec. 31, Activision reported a net loss of $286 million, or 23 cents a share, wider than last year's loss of $72 million, or 5 cents. Excluding items, the company posted earnings of 49 cents a share, easily exceeding Wall Street's average estimate of 43 cents, according to Thomson Reuters.

Net revenue for the quarter fell to $1.56 billion from $1.64 billion, but on an adjusted basis it came in at $2.5 billion, ahead of Wall Street's view for revenue of $2.23 billion. Sales were driven by the latest installment in the Call of Duty franchise, which became the first video game to surpass $550 million in retail sales in its first five days of release, the company reported. To date, the game has sold more than $1 billion in retail sales worldwide, according to market research firms.

"We generated approximately $1.2 billion in operating cash flow and ended the year with approximately $3.3 billion in cash and investments," Robert Kotick, chief executive, said in a statement. "We continue to put our cash to work, including the announcements we made today -- the authorization of our second billion-dollar stock buyback program in two years and our first cash dividend."

Activision will now pay an annual dividend of 15 cents a share.

For the first quarter, the company forecast adjusted earnings of 2 cents a share, short of analysts' view for 8 cents. For the full fiscal year, Activision forecast adjusted earnings of 70 cents a share, also below the Street's estimate of 73 cents.
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