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Activision Blizzard Posts Stunning Earnings With Acquisition Aspirations
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Activision Blizzard Inc. (NASDAQ: ATVI) reported its third-quarter financial results Monday after the markets closed. The video game giant had $0.21 in earnings per share (EPS) on $1.04 billion in revenue, which compares to Thomson Reuters consensus estimates of $0.16 in EPS on $951.73 million in revenue. The same period from the previous year had $0.23 in EPS on $1.17 billion in revenue.
On November 10, the company expects to launch StarCraft II: Legacy of the Void, the third installment of the company’s best-selling real-time strategy sequel. Legacy of the Void will be a standalone product that won’t require any prior releases, so it will be easier than ever for new players to get into the game and experience all the latest content.
In terms of the guidance, Activision Blizzard expects to have $0.09 in EPS on $1.22 billion in revenue for the fourth quarter.
At the same time, Activision Blizzard announced that it will acquire King Digital Entertainment PLC (NYSE: KING) for the price of $18 per share in cash, or roughly $5.9 billion. This fast-growing mobile gaming segment is expected to generate over $36 billion in revenue by the end of 2015, according to the company.
Bobby Kotick, CEO of Activision Blizzard, commented on earnings:
We continue to benefit from our focus on creating the world’s best interactive entertainment. Our incredibly talented employees around the world once again delivered great content and strong financial results. Mobile gaming is the largest and fastest-growing opportunity for interactive entertainment and we will have one of the world’s most successful mobile game companies and its talented teams providing great content to new customers, in new geographies throughout the world. King has a truly fantastic management team and over 1,600 incredibly talented employees and we are excited to welcome them into the Activision Blizzard family.
On the books, cash, equivalents and short-term investments totaled $4.52 billion, compared to $4.86 billion at the end of December 2014.
Shares of Activision Blizzard were up 2.8% to $35.56 Monday morning, with a consensus analyst price target of $35.51 and a 52-week trading range of $18.43 to $35.44.
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