Activision Blizzard (ATVI)

Activision Reports Record Q3 2007 Preliminary Results

For the third quarter of fiscal 2007, ended December 31, 2006, the company expects net revenues of $822.8 million, an increase of $6.6 million as compared to net revenues of $816.2 million previously reported for the third quarter of fiscal 2006.  Net income for the fiscal third quarter is expected to rise to $124.8 million, an 84% increase compared with net income of $67.9 million previously reported for the previous-year fiscal third quarter.  Earnings per diluted share for the quarter are expected to be $0.41, as compared with earnings per diluted share previously reported for the prior-year fiscal third quarter of $0.23.  Excluding the impact of equity-based compensation, the company expects to report earnings per diluted share of $0.42 for the fiscal third quarter.

For the fiscal second quarter ended September 30, 2006, Activision still expects to report net revenues of $188.2 million, as compared to net revenues of $222.5 million previously reported for the second quarter of the prior fiscal year.  The company expects to report a loss per share of $0.06, as compared to the previously reported loss per share of $0.05 for the previous fiscal year’s second quarter.  Excluding the impact of equity-based compensation, the company expects to report a loss per share of $0.05 for the fiscal second quarter.

For the nine-month period ended December 31, 2006, the company expects net revenues of $1.20 billion, as compared to net revenues of $1.28 billion previously reported for the comparable nine-month period of last fiscal year.  The company also expects earnings per diluted share for the nine-month period of $0.30, an increase of 76% as compared to earnings per diluted share of $0.17 previously reported for the comparable period of last fiscal year. Excluding the impact of equity-based compensation, the company expects earnings per diluted share of $0.33 for the nine months ended December 31, 2006.

Robert Kotick, Chairman and CEO of Activision, Inc., commented, “Net revenues for Activision’s third quarter of fiscal 2007 are expected to be the highest in the company’s history.  For the month of November, Activision was the #1 U.S. console and handheld publisher and the #2 publisher for the fiscal third quarter.  We achieved these results with a smaller, focused slate that was anchored by four key titles — Call of Duty® 3, Marvel™: Ultimate Alliance™, Tony Hawk’s Project 8™ and Guitar Hero II™ andstrong execution by our global sales and marketing teams.”

Kotick continued, “During the quarter, we grew both the Call of Duty and Tony Hawk franchises and established two new franchises, Marvel: Ultimate Alliance and Guitar Hero.  Strong launches for both PLAYSTATION® 3 in the U.S. and the Wii™ in the U.S. and Europe, as well as continued consumer adoption of the Xbox 360™ worldwide, suggests a great deal of momentum for next-generation videogame system adoption in the coming years.  As we look toward the future, we remain excited about the improving market conditions for our industry.  The combination of our product slate, the opportunities created by next-generation console systems, the increasing installed base of current-generation console hardware, continued growth in handhelds, as well as higher barriers to entry for new and existing competitors, positions us well to expand our net revenues, earnings and operating margins in the future. ”