Activision Misses Sales Estimates, Issues Pink Slips

Shares of "Call of Duty" maker Activision Blizzard Inc. (NASDAQ:ATVI) ticked much higher in early Wednesday despite a soft outlook for coming-year sales as it announced staff reductions.

The Santa Monica, Calif.-based company's earnings report was mixed, hitting estimates of $1.29 per share for the fourth quarter but missing revenue expectations, reporting sales of $2.38 billion below estimates of $3.04 billion. It projected full-year 2019 guidance of $2.10 per share on $6.3 billion in revenue, well below analyst estimates.

GAAP net revenues from digital channels were a record $1.79 billion. GAAP operating margin was a Q4 record of 29%. GAAP earnings per diluted share were a record $0.84, as compared with loss per share of $0.77 for the fourth quarter of 2017. On a non-GAAP basis,
Company officials said on a conference call that Activision won't improve in-game monetization as much as it would like and that it would have a net headcount reduction of 8% of its workforce across business units.

Said CEO Bobby Kotick,"While our financial results for 2018 were the best in our history, we didn’t realize our full potential. To help us reach our full potential, we have made a number of important leadership changes.

"These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises, our strong commercial capabilities, our direct digital connections to hundreds of millions of players, and our extraordinarily talented employees."

Shares jumped $1.83, or 4.4%, to $43.50