Enhancements to the toys-to-life game Skylanders could be a catalyst for Activision Blizzard stock. Credit: Activision Blizzard. 

Shares of Activision Blizzard (NASDAQ:ATVI) rose over 6% in late trading as investors cheered second-quarter results that crushed estimates. Here's a closer look at the Q2 totals versus Wall Street's projections:

ATVIRevenueYOY GrowthEPSYOY Growth
Consensus estimate  $667.05 million  1.4%  $0.08  33.3%
Q2 actual  $759 million  15.3%  $0.13  116.7%
DIFFERENCE  $91.95 million  13.9%  $0.05  83.4%

Sources: S&P Capital IQ and Activision Blizzard press release.

Commenting on the results, CEO Bobby Kotick said in a press release:

Our strategic focus on expanding our franchise portfolio with captivating and original new intellectual property, innovating on new platforms, and expanding into new geographies is reflected in our results. We outperformed our Q2 targets and last year's results on revenues, digital growth, and earnings per share. These strong results and the excitement for our future games have driven us to raise our full-year outlook. Our audience size and the total amount of time people spend with our franchises continue to grow. In the second quarter, our monthly active users grew by 35% year over year, and the time our communities spent playing our games grew by 25% year over year.

What went right: Higher engagement with Activision's gaming community led to much better than expected growth on both the top and bottom lines. Kotick and his team are also being careful to give shareholders the maxium return for their investment, boosting the quarterly dividend by 15% year over year to $0.23 per share. Activision Blizzard stock yields 0.90% annually as of this writing.

What went wrong: Promised stock buybacks didn't materialize in Q2, though I'm not so sure that's a bad thing. Activision Blizzard shares ended the day up nearly 11% over the past three months. Kotick and his team would have paid a premium had they used that time to spend a chunk of the $750 million set aside for repurchasing stock.

What's next: Looking ahead, Activision Blizzard forecasts $930 million in third-quarter revenue and $0.14 a share in profit after accounting for stock-based compensation and other noncash items. For the year, Activision Blizzard now anticipates $4.6 billion in adjusted revenue and $1.30 a share in adjusted earnings, up from its previous outlook of $4.425 billion and $1.20 a share, respectively.

For Q3, analysts tracked by S&P Capital IQ have the company generating $865.99 million in revenue and $0.14 a share in adjusted profit. That compares with $1,170 million and $0.23 a share in last year's third quarter.

Longer term, analysts have Activision Blizzard growing earnings by an average of 9.2% annually over the next three to five years. 

In the meantime, investors should continue to keep an eye on Activision Blizzard's engagement metrics as new titles reach the shelves. Plans include a Sept. 15 update of Destiny followed almost immediately by Skylanders SuperChargers, which introduces vehicles into the company's toys-to-life game franchise. Guitar Hero returns on Oct. 20, and then Call of Duty: Black Ops III arrives on Nov.6, during the company's annual BlizzCon showcase.