Activision Blizzard (ATVI - Get Report) shares slipped lower in extended hours trading Thursday after the video game maker indicated softer current quarter revenue guidance that overshadowed stronger-than-expected earnings for the three months ending in September.
The Santa Monica-based company reported adjusted earnings of 38 cents per share on revenue of $1.21 billion. Analysts were expecting the company to report earnings of 23 cents per share on revenue of $1.16 billion. However, the stock is falling after the company said that it expects net revenue of $2.65 billion. Analysts are expecting the company to report revenue of $2.75 billion in the holiday quarter.
"Our third quarter results exceeded our prior outlook for both revenue and earnings per share," said CEO Bobby Kotick. "Recent launches have enabled significant growth in the size of our audiences for our Call of Duty and World of Warcraft franchises."
"As we introduce mobile and free-to-play games based on our franchises we believe we can increase audience size, engagement and monetization across our wholly owned franchises," he added. "With a strong content pipeline and momentum in mobile, esports and advertising, we are confident we will remain a leader in connecting and engaging the world through epic entertainment."
Activision shares were indicated 1.85% lower in after-hours trading Thursday following the earnings release, a move that added to the stock's 3.2% decline during regular market hours and pegs the stock at $56.65 each.
Activision shares are down nearly 20% over the past 12 months following a disappointing earnings release in November a year ago where the company beat on expectations, but reported a significant drop from third quarter 2017.
The stock got a recent boost after the company announced that its new Call of Duty: Modern Warfare game achieved sales of more than $600 million worldwide in the first three days of its release.
However, those sales came after the end of the third quarter, making them not accretive to Activision's release Thursday.
Activision is a key holding in Jim Cramer's Action Alerts PLUS charitable trust.