Activision 3Q Profit Soars As Sales Grow
biz.yahoo.com
Thursday February 7, 5:24 pm ET
By Barbara Ortutay, AP Business Writer
Activision 3rd-Quarter Profit Soars on Strong Sales of 'Guitar Hero III,' 'Call of Duty 4'
NEW YORK (AP) -- Activision Inc., set to become the world's biggest video game company with its pending acquisition by Vivendi SA, said Thursday its fiscal third-quarter profit soared on strong sales of the latest "Call of Duty" and "Guitar Hero" games.
For the quarter ended Dec. 31, Activision earned $272.2 million, or 86 cents per share, growing 90 percent from a profit of $142.8 million, or 46 cents per share, in the same period a year earlier.
Excluding stock options costs, the company earned 90 cents per share. Analysts polled by Thomson Financial had expected a profit of 80 cents per share, excluding items.
Revenue jumped 80 percent to $1.48 billion from $824.3 million, easily beating Wall Street's estimate of $1.36 billion.
Strong sales of "Call of Duty 4: Modern Warfare" and "Guitar Hero III: Legends of Rock" fueled the quarter's results. Activision, like other video game publishers, makes most of its money during the December quarter. Even as the economic slowdown hurt other retail sectors, people flocked to buy video games during the holidays.
"Broader audiences are responding to products like Guitar Hero, and we expect that the demographics for videogames will continue to expand," said Chairman and Chief Executive Robert Kotick in a statement. He added that Activision's pursuit of the regulatory and shareholder approvals needed to combine with Vivendi Games is proceeding on schedule.
The deal, which will combine Activision with the publisher of the popular online game "World of Warcraft," is set to close in the first half this year.
"The combined company expects to have the broadest, most diverse portfolio of entertainment assets in the industry, positioning it to capitalize on the continued worldwide growth in interactive entertainment," Kotick continued.
Activision expects fourth-quarter earnings of 2 cents per share, or 4 cents per share excluding stock options costs, on sales of $350 million. Analysts predict a profit of 4 cents per share on sales of $279.6 million.
The company boosted its fiscal 2008 earnings outlook to 97 cents per share from 85 cents per share. Without options expenses, Activision expects $1.07 per share in the fiscal year, above analysts' expectations of 96 cents per share.
Activision expects full-year sales of $2.65 billion, up from its earlier forecast of $2.45 billion, which was roughly in line with analyst estimates. |
