Shares of Activision Blizzard (ATVI) - Get Activision Blizzard, Inc. Report dropped after hours Tuesday despite the company reporting record second quarter results as in-game purchases helped propel the company ahead of analyst expectations for the quarter.
The video game maker behind games such as Call of Duty, World of Warcraft and Candy Crush, reported earnings of 81 cents per share on revenue of $1.93 billion. Analysts were expecting the company to report earnings of 59 cents per share on revenue of $1.7 billion.
Activision shares initially dropped 3% after hours but recovered recently to be off 0.8% to $85.75.
"Our record engagement resulted in greater revenue and earnings per share than previously forecast. While economic uncertainty could have an impact on our near-term results, the initiatives that drove our growth for the first half of the year should also provide the foundation for long-term growth," said CEO Bobby Kotick in a statement.
Activision's release comes a day after rival Take-Two Interactive (TTWO) - Get Take-Two Interactive Software, Inc. Report reported strong revenue growth on its way to a blowout quarter as in-game purchases helped fuel net bookings growth.
Activision reported having 125 million monthly active users in the quarter thanks in part to the 75 million gamers who play Call of Duty online. Blizzard's side of the business reported 32 million monthly active users in the quarter driven by World of Warcraft.
For the third quarter, the company is expecting revenue of $1.8 billion with an EPS of 75 cents per share, ahead of analyst expectations of revenue of $1.39 billion on earnings of 41 cents per share for the quarter.
For the year, the company revised its revenue guidance upward by half a billion dollars to $7.3 billion from $6.8 billion.