Activision Blizzard earnings and forecast come up short of expectations amid layoffs

Activision Blizzard Inc. reported record annual performance Tuesday, but missed estimates and revealed it is laying off employees even while increasing its payments to shareholders. The videogame publisher announced fourth-quarter earnings of 84 cents a share on revenue of $2.43 billion, up from $2.08 billion a year ago. After adjusting for share-based compensation and other effects, Activision claimed profit of 90 cents a share. Activision also said bookings, which reflects total business including deferred revenue, came in at $2.84 billion. Analysts on average projected adjusted earnings of $1.29 a share on bookings of $3.04 billion, according to FactSet. Activision also said that it was restructuring; while it did not give a layoff figure, it did say it expected $150 million in restructuring charges. A spokeswoman said that Activision plans to reallocate those resources to support development of its most popular titles. “The number of developers working on Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone and Diablo in aggregate will increase approximately 20% over the course of 2019,” Activision said in its release. Activision’s forecast was also well short of analysts’ expectations, calling for adjusted earnings of $1.85 a share on GAAP revenue of $6.03 billion. Analysts on average expected adjusted earnings of $2.50 a share on revenue of more than $7 billion, according to FactSet. The company also revealed that it is increasing its dividend by 9%, to 37 cents a share, and that the board approved a two-year, $1.5 billion stock-repurchase plan. Activision shares were trading slightly higher in late trading Tuesday, after closing with a 3.9% gain.

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