Call of Duty and Skylanders help Activision beat earnings expectations

Activision’s old hits keep the dough rolling in.

The publisher announced the results for its fourth quarter and for 2013 as a whole today, and it revealed that it delivered 79 cents per share (EPS) on a non-GAAP (generally accepted accounting practices) basis for the quarter. That beat estimates by 6 cents. The Call of Duty creator also reported non-GAAP revenues of $2.272 billion over the same period. That was better than its own guidance of $2.215 billion.

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For all of 2013, Activision delivered 94 cents earnings per share, down from $1.18 EPS in 2012, and $4.342 billion in net revenue, which was down from $4.987 billion in the prior year.

Earlier in the year, Activision purchased its independence from its controlling entity, French multimedia conglomerate Vivendi. The publisher now owns a controlling interest in itself.

“2013 was a transformational year for Activision Blizzard and for our industy,” Activision chief executive officer Bobby Kotick said. “Our transaction with Vivendi returned us to independence and eliminated the challenges and constraints of being a controlled company. The continued success of our games delivered better-than-expected financial results, including stronger net revenues and earnings per share, and over $1.26 billion in operating cash flow.”

Activision’s stable of familiar franchises were the biggest part of its success in 2013. Call of Duty: Ghosts, Skylanders: Swap Force, and World of Warcraft all performed well.

Looking forward to 2014, the company expects to generate $4.6 billion in net revenue and $1.26 earnings per share. Activision once again expects the old franchises to help it realize this guidance as well as new titles like the first-person shooter Destiny, the first game from groundbreaking Halo developer Bungie since it parted ways from Microsoft.

“As we look to 2014 and beyond, we have the strongest and most diverse pipeline of games in our history,” said Kotick. “In 2014, we expect these releases to enable us to grow non-GAAP revenues year over year and generate record non-GAAP earnings per share. We expect Bungie’s Destiny, an innovative shared-world, first-person action game to be Activision’s next billion dollar franchise.”

The company is also expecting free-to-play to make a bigger impact on its bottom line in 2014. Games like Blizzard’s collectible-card title Hearthstone: Heroes of Warcraft (which is in open beta) and its mulitplayer online battler Heroes of the Storm (which is a few weeks off) will likely help the company pull in significant free-to-play revenue.