Activision Blizzard revenue jumps in Q1 2013

Video games maker Activision Blizzard Inc warned investors on Wednesday that it expects a challenging second-half and holiday quarter driven by heavy competition and uncertainty around the launch of new video game consoles.

Shares of Activision were down 6.3 percent to $14.30 in after-hours trading after closing at $15.26 on the Nasdaq.

Subscribers of “World of Warcraft,” Activision’s most profitable business and the source of a steady stream of subscription-based revenue, dropped sharply to 8.3 million last quarter from 9.6 million in the previous quarter, the company said.

However, the game publisher’s warning overshadowed strong first-quarter earnings.

The Santa Monica-based company said non-GAAP revenue, adjusted for the deferral of digital revenue and other items, rose to $804 million, surpassing Wall Street’s average revenue forecast for $704.6 million and up 37 percent from $587 million in the same quarter a year ago.

Non-GAAP income totaled $199 million, or 17 cents per share, in the fourth quarter, compared with $67 million, or 6 cents per share a year earlier. This beat Wall Street’s average earnings estimate of 11 cents per share, according to Thomson Reuters I/B/E/S.

(Reporting by Malathi Nayak; editing by Richard Chang, G Crosse)