Activision Blizzard Inc. (ATVI) reported strong third quarter 2010 results, beating the Zacks Consensus Estimate by 3 cents.
Earnings, including stock based compensation and excluding one-time items, were 10 cents per share, up from 2 cents reported in the prior-year quarter. This was well above Activision’s earnings guidance of 8 cents per share. The year-over-year growth was primarily driven by a robust revenue growth and operating margin expansion.
Revenue
Revenues on a non-GAAP basis were $857.0 million, up 13.5% year over year from $755.0 million. This was well above Activision’s guidance of $725.0 million.
The year-over-year growth was primarily driven by strong sales from the PC and other games segment and higher distribution revenues, which fully offset weak results from consoles (down 25.0% year over year) and handheld devices (down 23.0% year over year).
During the quarter, strong performance from Activision Publishing's Call of Duty franchise and Blizzard Entertainment's World of Warcraft and StarCraft II: Wings of Liberty also contributed significantly to the revenue growth.
During the quarter, Call of Duty: Modern Warfare 2 remained a top-10 franchise overall in the U.S. and Europe, according to research firm NPD Group.
Activision released StarCraft II: Wings of Liberty in the third quarter, which sold more than one million copies within the first 24 hours of its release, instantly making it the best-selling PC game of 2010, and more than 1.5 million copies within the first 48 hours of its release, making it the fastest-selling strategy game of all time.
StarCraft II: Wings of Liberty sold more than three million copies worldwide in the first month of its release.
On a geographic basis, revenues from North America (52.0% of total revenue) increased 11.0% year over year to $447.0 million while revenues from Europe (38.0% of total revenue) were up 8.0% year over year to $334.0 million. Although the Asia-Pacific region contributed only 7.0% of total
