ATVI Activision Blizzard Inc

By Patrick Thomas and Sarah E. Needleman 

Activision Blizzard Inc. said it plans to cut about 8% of its workforce, primarily by consolidating its sales and administrative teams across its business units, as the company grapples with changes in how people buy and play videogames.

As part of the restructuring, Activision Blizzard plans to boost its number of developers by about 20% in 2019 to ramp up new content for its biggest franchises such as "Call of Duty" and "Candy Crush." The company said it expects to record a $150 million pretax charge this year in connection with the moves.

Shares in Activision Blizzard rose 2.3% in after-hours trading, though the company also gave softer-than-expected guidance on sales and profit for 2019. The stock is down about 38% over the past year.

The Santa Monica, Calif., company reported a fourth-quarter profit of $650 million, or 84 cents a share, compared with a loss of $584 million, or 77 cents a share, a year earlier. Excluding one-time items, Activision Blizzard earned a profit of 90 cents a share. Analysts polled by FactSet were expecting earnings of 84 cents a share on an adjusted basis.

In the latest quarter, sales rose to $2.38 billion from a year-earlier $2.04 billion but were below the $3.04 billion analysts polled by FactSet had expected.

"While our financial results for 2018 were the best in our history, we didn't realize our full potential," Chief Executive Bobby Kotick said in a statement.

For 2019, the company projected adjusted earnings of $1.18 a share on $6.03 billion in revenue. Analysts had expected profit excluding one-time items of $2.06 a share on $7.45 billion in revenue.

The company also plans to buy back up to $1.5 billion of its stock over the next two years.

Write to Patrick Thomas at Patrick.Thomas@wsj.com and Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

February 12, 2019 17:23 ET (22:23 GMT)

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