- Activision Blizzard beats earnings expectations
- Take Two Interactive shares slump on lower guidance
- Nintendo shares gain after profit upgrade
Video games publisher and developer Activision Blizzard (ATVI:NASDAQ) beat third quarter earnings expectations with earnings per share coming in $0.55 compared with Street estimates of $0.42.
Revenues of $1.78 billion were slightly ahead of expectations driven by the success of Call of Duty: Modern Warfare II which broke records as the fastest-selling title in the history of the franchise. Worldwide sales of the game surpassed $1 billion in the first 10 days following its release.
The company also confirmed that the agreed all-cash $95 per share acquisition by software giant Microsoft (MSFT: NASDAQ) was expected to close in the fiscal year ending 30 June 2023.
The shares gained 0.5% in pre-market trading to $71.60, representing a discount of around 25% to the offer price. The steep discount reflects regulatory concerns.
The UK’s CMA (Competition and Markets Authority) is investigating whether the acquisition will restrict market competition.
DISSAPOINTING OUTLOOK HITS TAKE TWO SHARES
Meanwhile, shares in video game publisher Take Two Interactive Software (TTWO: NASADQ) plunged 18% in pre-market trading after the company missed second quarter estimates on Monday and lowered full-year guidance.
The company, which owns the Grand-Theft Auto Franchise and recently purchased Zynga, said macroeconomic headwinds toward the end of the quarter gave it ‘concerns’ about the full-year.
For the fiscal year ending 31 March the company is now guiding for net bookings to be around $5.45 billion compared with a forecast of $5.85 billion three months ago.
NINTENDO INCEASES PROFIT GUIDANCE
Japanese console gaming giant Nintendo (7974:TYO) increased profit guidance on the back of a weaker yen, sending the shares up 2% on Tuesday.
The company expects full-year profit to the end of March to come in around Y400 billion ($2.73 billion), up from its prior guidance of Y340 billion.
However, continued computer chip shortages constrained production of its Switch gaming console by around 10% to 19 million units. The creator of titles such as Super Mario Bros and Legend of Zelda said chip supplies had begun to improve in recent months.
