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Mod
The Omniscient
/ Moderator
Dec 19, 2005, 11:53 PM
Post #1 of 1
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Activision 4th Quarter 2005 Results to be lower
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Activision warned its profit for the remainder of this fiscal year would miss its previous target as a shift to a new generation of game consoles and weak consumer spending slowed sales for the video game publisher.
Shares in Activision slipped 13.6 percent to $12.36 in extended trading after California-based Activision said it expects earnings will be "significantly lower" than previously expected in the quarter ending December 31, when most video game publishers reap about half their annual sales. The warning comes about a week after video-game industry leader Electronic Arts Inc. signaled sales were below expectations in the first part of December.
Activision said its 4th quarter, ending in March, would also be hit by slow sales. Its overall portfolio of products is not selling as well as anticipated and orders for its most profitable titles may be weak, the company said.
Activision on November 2 raised its net revenue outlook for the full 2006 fiscal year to $1.48 billion, and said it expected earnings per share of 52 cents. At the same time, it backed its third-quarter revenue outlook of $790 million and said it expected per-share earnings of 52 cents. For the fourth quarter, it forecast net revenue of $226 million and earnings per share of 5 cents. The company posted small net losses on a per share basis in the first and second quarters of fiscal 2006.
Analysts, on average, had seen Activision posting third-quarter net income of 52 cents a share on revenue of $788.6 million. For the fourth quarter, they were expecting net income of 6 cents a share on revenue of $227.5 million. Activision shares had closed up 72 cents to $14.30 on the Nasdaq prior to the warning.
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