Activision Blizzard Beats Expectations

Activision Blizzard ( ATVI) surged in late trading Wednesday after exceeding expectations with its third-quarter results, even as the company's outlook came in weaker than expected.

The Santa Monica, Calif., video game publisher, best known for its World of Warcraft and Guitar Hero series, posted a loss of $108 million, or 8 cents a share, swinging from a profit of $48 million, or 8 cents a share, in the year-ago quarter. Excluding items related to the July merger with Vivendi's Blizzard unit, as well stock-options expenses, Activision said it earned a profit of 7 cents a share in the quarter.

Revenue in the quarter more than doubled from a year ago to $711 million. On average, analysts were expecting a profit of 4 cents a share on sales of $632 million, according to Thomson Reuters.

After falling 7.4% during Wednesday's session, shares of Activision jumped 10.6% in late trading to $12.14. Among its rivals, Electronic Arts ( ERTS) fell 4.4% in regular trading Wednesday and Take-Two ( TTWO) lost 2.9%.

"We are excited about our holiday releases, which are all based on proven franchises, and will deliver our entire slate on schedule with strong product quality on our key titles," said CEO Robert Kotick in a statement. "However, we remain cautious given the likely slowdown in consumer spending this holiday season."

Looking ahead to the holiday quarter, the company expects earnings of 29 cents a share on revenue of $2.2 billion. Wall Street was projecting a profit of 33 cents a share on sales of $2.28 billion.

Separately, Activision Blizzard's board authorized stock repurchase program for the company to buyback up to $1 billion common stock.

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