Activision Blizzard's fourth-quarter net profit of $159 million, net profit and revenue both fell

On February 12, Activision Blizzard today announced its fourth quarter and full-year financial results for the 2015 fiscal year.

On February 12, Activision Blizzard today announced its fourth quarter and full-year financial results for the 2015 fiscal year. The report shows that Activision Blizzard's net revenue for the fourth quarter was US$1.353 billion, down from US$1.575 billion in the same period last year; net profit was US$159 million, down 56% from US$361 million in the same period last year. Activision Blizzard's fourth-quarter results fell short of Wall Street analysts 'expectations, and its outlook for adjusted earnings per share for the first quarter of 2016 fell short of expectations, sending its after-hours share price plummeting more than 11%.

Fourth-quarter results:

In the fiscal quarter ended December 31, Activision Blizzard's net revenue was $1.353 billion, down from $1.575 billion in the same period last year. Excluding certain one-time items (not in accordance with U.S. GAAP), Activision Blizzard's adjusted net revenue for the fourth quarter was US$2.118 billion, slightly lower than US$2.148 billion in the same period last year, failing to meet analysts 'previous expectations. A survey by financial information provider FactSet shows that analysts on average expect Activision Blizzard's fourth-quarter revenue to be US$2.2 billion.

By business category, Activision Blizzard's net revenue from product sales in the fourth quarter was US$711 million, down from US$1.094 billion in the same period last year; net revenue from subscriptions, licensing and other businesses was US$642 million, up from US$481 million in the same period last year.

By distribution channel, Activision Blizzard's net revenue from retail channels in the fourth quarter was US$462 million, accounting for 34% of total net revenue; in the same period last year, it was US$846 million, accounting for 54% of total net revenue. Activision Blizzard's net revenue from digital online channels in the fourth quarter was US$724 million, accounting for 54% of total net revenue; in the same period last year, it was US$539 million, accounting for 34%. Activision Blizzard's net revenue from other businesses in the fourth quarter was US$167 million, accounting for 12% of total net revenue; in the same period last year, it was US$190 million, accounting for 12% of total net revenue.

By region, Activision Blizzard's net revenue from North America in the fourth quarter was US$659 million, accounting for 49% of total net revenue; in the same period last year, it was US$806 million, accounting for 51% of total net revenue. Activision Blizzard's net revenue from Europe in the fourth quarter was US$522 million, accounting for 39% of total net revenue; in the same period last year, it was US$653 million, accounting for 41% of total net revenue. Activision Blizzard's net revenue from the Asia-Pacific region in the fourth quarter was US$172 million, accounting for 13% of total net revenue; in the same period last year, it was US$116 million, accounting for 8%.

Activision Blizzard's total costs and expenses in the fourth quarter were $1.103 billion, down from $1.137 billion in the same period last year. Among them, product sales costs were US$361 million, down from US$432 million in the same period last year; online sales costs were US$63 million, up from US$61 million in the same period last year; software royalties and amortization sales costs were US$98 million, down from US$124 million in the same period last year; intellectual property licensing sales costs were US$16 million, up from US$14 million in the same period last year; Product development expenses were $193 million, up from $184 million in the same period last year; sales and marketing expenses were $289 million, up from $247 million in the same period last year; and general affairs and administrative expenses were $83 million, up from $75 million in the same period last year.

Activision Blizzard's fourth-quarter net income was $159 million, or 21 cents per share, which was less than the same period last year. In the fourth quarter of fiscal 2014, Activision Blizzard's net income was $361 million, or earnings per share were 49 cents. Excluding certain one-time items (not in accordance with U.S. GAAP), Activision Blizzard's fourth-quarter adjusted earnings per share were 83 cents, down from 94 cents in the same period last year, failing to meet analysts 'previous expectations. A FactSet survey showed that analysts on average expected Activision Blizzard's fourth-quarter earnings per share of 86 cents.

Full-year results:

Activision Blizzard's revenue in 2015 was US$4.66 billion, up from US$4.41 billion in 2014; revenue not in accordance with U.S. GAAP was US$4.62 billion, down from US$4.81 billion in 2014. Activision Blizzard's 2015 net income was $892 million, up from $835 million in 2014; earnings per share were $1.19, up from $1.13 in 2014; adjusted earnings per share not in accordance with U.S. GAAP was $1.32, down from $1.42 in 2014.

Performance expectations:

Activision Blizzard expects net revenue for the fourth quarter of fiscal 2015 to reach US$1.260 billion, and net revenue not calculated in accordance with U.S. GAAP will reach US$800 million, higher than the average analyst forecast of US$756.3 million; Earnings per share are expected to reach 21 cents, and earnings per share not calculated in accordance with U.S. GAAP will reach 11 cents, less than the average analyst forecast of 19 cents.

Activision Blizzard also predicts that net revenue for fiscal 2015 will reach US$6.100 billion, and net revenue not calculated in accordance with U.S. GAAP will reach US$6.250 billion; earnings per share are expected to reach 45 cents, and earnings per share not calculated in accordance with U.S. GAAP will reach US$1.75.

Stock price changes:

On the same day, Activision Blizzard's share price rose US$0.37 to close at US$30.52 in regular trading on the Nasdaq market, an increase of 1.23%. In subsequent after-hours trading as of 17:43 EST (6:43 Beijing time on the 12th), Activision Blizzard's share price fell US$3.37 to US$27.15, a decrease of 11.04%. In the past 52 weeks, Activision Blizzard's high share price has been $39.93 and its low price has been $22.28.

Editor: queenie