(Reuters) - Videogame maker Activision Blizzard Inc, known for its “Call of Duty” and “Destiny” titles, forecast revenue for the first quarter below market estimates, factoring in the impact of a strengthening dollar.
Shares of Activision Blizzard, also known for its “World of Warcraft”, “Skylanders” and “Diablo” games, were down 8.3 percent in extended trading on Thursday.
The dollar had risen 15.6 percent in the six months through Wednesday. Activision Blizzard earns about half of its revenue from outside the United States.
“As a vast majority of our product development and head count costs are U.S.-based, we have fewer natural cost offsets to dampen the impact of currency translation,” Chief Financial Officer Dennis Durkin said on a conference call.
Activision Blizzard forecast an adjusted profit of 5 cents per share and adjusted revenue of $640 million for the quarter ending March.
Analysts on average were expecting a profit of 18 cents per share and revenue of $777.7 million, according to Thomson Reuters I/B/E/S.
The company also forecast adjusted profit of $1.15 per share and adjusted revenue of $4.40 billion for 2015. Analysts were expecting a profit of $1.43 per share and revenue of $4.71 billion.
Activision Blizzard launched a two-year share buyback plan of $750 million.
The company’s forecast was “unrealistically low,” Wedbush Securities analyst Michael Pachter told Reuters. “It looks to me that they want to buy their stock back cheaply.”
Activision Blizzard’s adjusted revenue fell 2.6 percent to $2.27 billion for the fourth quarter ended Dec. 31. Net income rose to $361 million, or 49 cents per share, from $174 million, or 22 cents per share, a year earlier.
Adjusted for deferred revenue and other items, the company earned 94 cents per share, handily beating an expected 88 cents.
“The core business is great,” Pachter said.
Activision Blizzard’s hit military-action game “Call of Duty: Advanced Warfare” was the top-selling console video game globally in 2014, while “Skylanders Trap Team” was the top-selling kids video game globally.
Sci-fi shooter game “Destiny” was the No.3 top-selling new release in North America and Europe in 2014 with more than 16 million registered users and active players playing an average of over three hours per day.
Activision Blizzard shares had risen about 29 percent in the past 12 months through Thursday’s close of $21.82.
Editing by Joyjeet Das