Activision Blizzard financials "better-than-expected"

Activision Blizzard has reported its fourth quarter and full year financial results ending December 31, 2009, with the headline news that the company has posted the strongest quarter from a third party publisher in the industry's history.

The company's CEO, Bobby Kotick, delivered the news in a call to investors, and also noted that Call of Duty: Modern Warfare 2 became the company's third title in two years to surpass the $1 billion revenue mark.

In total the publisher posted GAAP revenues for the year of $4.3 billion - up from $3.0 billion in 2008 - amounting to a profit of $113 million - up from a loss of $107 million in 2008.

For the fourth quarter alone - in which key property Modern Warfare 2 was released - was actually down year-on-year, from $1.64 billion to $1.56 billion, with losses increasing in that time from $72 million to $286 million.

Additionally, it was revealed that the company produced the highest digital revenues in the business, taking about $1.3 billion in total - undoubtedly driven by the ongoing success of World of Warcraft.

Meanwhile a new share buyback scheme was announced totaling $1 billion - the second such move in the space of a year - and a cash royalty of 15 cents per share, in a bid to deliver shareholder value.

In terms of outlook for this fiscal year, to the end of December 2010, CFO Thomas Tippl announced a prediction of $4.2 billion for total revenues - a slight decline blamed on the continued decline of the music game genre as the company delivers a "more focused slate" based on a higher software mix and fewer high price point peripheral sales.

However, it was noted that DJ Hero was still the highest-grossing new IP released in the calendar year, while unit sales for Guitar Hero was actually up over 2008.

Publishing boss Mike Griffith added that he expected the digital sector of the industry to grow by around 20 per cent this year over last in both the US and Europe, as the penetration of broadband continues to increase.

The digital sector will have a special place for Activision Blizzard in 2010 with the release of World of Warcraft: Cataclysm confirmed for release some time this year, while Starcraft II will be available for download via the Battle.net platform at release (as well as in stores).

In the first 30 minutes of after hours trading, the company's share price had jumped by 5 per cent to $10.10.