Activision Reports Second Quarter Fiscal Year 2007 Results
biz.yahoo.com
Monday November 6, 4:05 pm ET
- Q2 Net Revenues Increased 45% Over Prior Outlook -
- Next-Gen Launch Lineup Largest in Company's History -
SANTA MONICA, Calif.--(BUSINESS WIRE)--Activision, Inc. (Nasdaq:ATVI) today reported financial information for the second fiscal quarter ended September 30, 2006.
Net revenues were $188.2 million, a 45% increase over the company's prior outlook of $130.0 million, which was given on August 3, 2006. For the second quarter of last fiscal year, the company reported net revenues of $222.5 million. Net revenues for the six-month period ended September 30, 2006 were $376.2 million, as compared to net revenues of $463.6 million reported for the six-month period of last fiscal year. The company ended the quarter with $747 million in cash and short-term investments.
As previously announced, in light of the ongoing review of the company's historical stock option grant practices by the special sub-committee of the independent members of the Board of Directors, today's announcement includes only selected financial information for the second quarter.
Robert Kotick, Chairman and CEO of Activision Inc., stated, "Our second quarter net revenues exceeded our expectation and were driven by improving market conditions and the success of our franchises including Call of Duty®, Guitar Hero(TM) and World Series of Poker®, as well as our distribution and affiliate businesses. We are optimistic about our exciting holiday lineup, although we remain cautious of the many variables that can affect the holiday selling season, including software pricing and the introductions of the PLAYSTATION® 3 and Wii(TM).
Kotick continued, "We are excited about the long-term opportunities that should result from the next-generation consoles and handheld platforms. These new platforms combined with our strong portfolio of brands, world-class development capabilities, worldwide distribution network and deep financial resources should enable us to continue to take advantage of the potential positive market fundamentals over the long-term."
Business Highlights
During the quarter, Activision's critically acclaimed Call of Duty 2 for the Xbox 360 video game and entertainment system crossed the 1 million unit sales mark in the U.S., making the title the #1 best-selling game to date on the Xbox 360(TM) video game and entertainment system, according to The NPD Group.
During the quarter, Activision confirmed that the company will be releasing five launch titles for the Wii -- Tony Hawk's Downhill Jam(TM), Call of Duty® 3, Marvel: Ultimate Alliance(TM), Rapala® Tournament Fishing and World Series of Poker®: Tournament of Champions.
For the quarter, Guitar Hero was a top 10 best-selling title in the U.S. 10 months following the game's initial release, according to The NPD Group. Additionally, on September 27, 2006, Activision confirmed that Guitar Hero II(TM) is currently in development for the Xbox 360 video game and entertainment system.
On September 15, 2006, MTV Networks Kids and Family Group's Nickelodeon, a division of Viacom Inc., entered into a distribution agreement with Activision Value Publishing under which Activision will be the exclusive distributor of three new Nick Jr. PC CD-ROM titles, published by Nickelodeon and based on the top preschool series on commercial television, Dora The Explorer(TM), The Backyardigans(TM), and Go, Diego, Go!(TM).
On October 3, 2006, Activision announced the appointment of Brian Hodous to the newly created position of Chief Customer Officer. Mr. Hodous will lead Activision Publishing's global sales operations. Mr. Hodous most recently served as Group Director and Executive Vice President of Global Sales at Cadbury Schweppes, where he managed more than 16,000 sales professionals in 190 countries and delivered $12.3 billion in annual revenue.
Activision's third quarter slate will be driven by a diverse lineup of titles based on some of the company's largest franchises. The company will release three launch titles for the PLAYSTATION 3 (Tony Hawk's Project 8(TM), Call of Duty 3 and Marvel(TM): Ultimate Alliance) and five titles for the Wii (Tony Hawk's Downhill Jam, Call of Duty 3, Marvel: Ultimate Alliance, Rapala Tournament Fishing and World Series of Poker: Tournament of Champions).
Built from the ground up for the next-gen consoles, Tony Hawk's Project 8 delivers an incredibly authentic skateboarding experience and will be available for the Xbox 360(TM) video game and entertainment system from Microsoft, PLAYSTATION 3, PlayStation® 2 computer entertainment system, Xbox® video game and entertainment system from Microsoft and the PlayStation Portable Entertainment Platform.
A new brand extension designed exclusively for the Wii and Nintendo DS(TM), Tony Hawk's Downhill Jam lets players experience the breakneck speed of downhill skateboard racing as they tear up steep terrain while performing tricks and outmaneuvering opponents.
The follow-up to the #1 next-generation game, Call of Duty 3 delivers the intensity of being closer than ever to the fury of combat during the Normandy Breakout, the historic campaign that led to the liberation of Paris. The game will be released on the Xbox 360 video game and entertainment system from Microsoft, PLAYSTATION 3, Wii, PlayStation 2 computer entertainment system and Xbox video game and entertainment system from Microsoft.
An all-new action/role-playing game, Marvel: Ultimate Alliance lets players create their Marvel dream team from the largest roster of Super Heroes(TM) ever in a video game and pursue an epic quest that will determine the fate of Earth and the Marvel universe. The game will be available for the PLAYSTATION 3 and Wii in November and shipped for the Xbox 360 video game and entertainment system from Microsoft, PlayStation 2 computer entertainment system, Xbox video game and entertainment system from Microsoft, PC, PlayStation Portable Entertainment Platform and Game Boy® Advance(TM) on October 26, 2006.
Coming out on the Wii platform, Rapala Tournament Fishing lets players embark on all new angling adventures in 16 of the world's most desirable fishing locales utilizing authentic gear from Rapala, the world's largest manufacturer of fishing lures and #1 fishing brand in the world.
Building on last year's #1 poker title and the #1 brand in poker, World Series of Poker: Tournament of Champions for the Wii puts players on the Pro Circuit as a new pro and protege of Chris "Jesus" Ferguson.
Guitar Hero II for the PlayStation 2 computer entertainment system features more songs, more venues and a lot more rocking, as well as additional multiplayer modes in which two guitarists can play lead and rhythm or bass tracks together.
Additionally, Activision will be releasing several handheld titles including GUN(TM) Showdown and Activision® Hits Remixed for the PSP; and Over the Hedge(TM): Hammy Goes Nuts! for the PSP, Nintendo DS and Game Boy Advance; and Spider-Man(TM): Battle for New York for the Nintendo DS and Game Boy Advance.
Company Outlook
For the third quarter of fiscal 2007, Activision expects net revenues of $600 million. For the fourth quarter, the company expects net revenues of $175 million. As announced on October 25, 2006, Activision increased its fiscal year net revenue outlook to $1.150 billion, from its prior net revenue outlook of $1.075 billion, which was announced on August 3, 2006. The company believes that the increase in its third quarter and full year net revenue outlook will be offset by higher legal expenses relating primarily to its internal review of historical stock option practices, including expenses relating to the previously announced informal SEC inquiry and derivative litigation, and the impact of the delayed release of Sony's PLAYSTATION 3 system in Europe until March 2007. The company expects that the majority of the impact will occur in its fiscal third quarter.
Activision also reaffirmed its fiscal year 2008 net revenue outlook, which is expected to exceed $1.6 billion. |
