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Activision Reports Fiscal Earnings

Bank Of America Investment Activision has officially disclosed their financial figures for both the previous third fiscal quarter, and the nine-month period ending on December 31st, 2005. The company, one of the leading publishers of interactive entertainment in the world posted a quarterly net revenue of $816.2 million for the third fiscal quarter. The recently disclosed revenue figure marks a twenty percent increase over the previous year's total of $680.1 million and established a financial record for the company.

The company's net revenues for the nine-month period ending on 12/31/05 amounted to $1.28 billion, establishing another company wide record improving upon the previous year's high mark of $1.28 billion.

Robert Kotick, Chairman and CEO of Activision, Inc., commented, "Net revenues for the third quarter and first nine months of fiscal year 2006 were the highest in the company's history. According to NPD we were the #2 overall software publisher in the U.S. and remain the number #1 market share publisher for the Xbox 360. We ended the quarter with approximately $765 million in cash and short-term investments and $1.2 billion in shareholders' equity."

The company's revenues, or simply the amount generated from the sale of goods or services excluding expenses while record breaking were not enough to yield an improvement in net earnings for either the quarter or the nine-month period. Activision's net income or profit measured in at 67.9 million, compared with net income of $97.3 million for the previous year's third quarter. The nine-month period ending on December 31st, 2005 produced an overall profit for the company of $51,118 million, considerably less than the$134,762 million figure posted for the previous period.

Kotick continued, "Despite these achievements [increased net revenue], we were disappointed with our earnings performance this quarter which was the result of weaker than expected market conditions in the U.S. and Europe due to the transition from current-generation consoles to the next generation of video game systems."

While the Call of Duty series brought the company a considerable measure of success, the title second best selling PC game for the third quarter and number one selling Xbox 360 title in the United States, however both the True Crime and Gun releases performed below expectations.

As a result, diluted earnings, if all convertible securities were exercised (if convertible bonds, stock options, and warrants trade in for stock), fell to $0.23 per diluted share, compared to $0.35 for the previous third quarter. The nine-month period saw diluted earnings decrease as well, as a mark of $0.17 was posted, a figure down from the previous year's total of $0.49 per diluted share. Wall-Street considers diluted earnings per share as an accurate reflection of a corporation's earnings, and as a result the company's stock price fell 7.24 percent or $1.04 per share after today's earnings were revealed.

Activision appears only slightly mitigated in regards to their latest earnings report. "In the long term, we are planning for market growth that historically follows the introduction of new console hardware. To leverage this future growth and prepare for fiscal 2008, which we expect will be the biggest year in Activision's history, we will continue to focus on investment in our product development resources and intellectual property portfolio, growing our international operations and optimizing our worldwide cost structure and resource allocation," Kotick added.

Optimism within the corporation remains high as Gun, while in some ways a disappointment ranked in as the number one highest selling title based off a new piece of intellectual property. Other highlights included the company ranking in as the number two publisher overall and the predominant publisher for next-generation gaming platforms with their success on the Xbox 360. Additionally, within the discussed nine-month period the company has signed long term contracts with Marvel Entertainment, prolonging the company's exclusive coverage of the renowned comic book company's intellectual property, Sony Pictures, and DreamWorks.

While the company remains largely confident, Activision has cited weaker than expected market conditions as rational for the forthcoming fiscal year as well as fourth quarter ending on March 31st, 2006. Activision now expects net revenues of $1.405 billion to $1.415 billion and earnings per share of $0.09 to $0.11 for the full fiscal year. Fourth quarter figures have been adjusted to $125 million to $135 million in net revenues and a loss per share of $0.07 to $0.09.

In regards to their long term status, the company has reported initial expectations for the 2007 fiscal year amounting to slightly over $1 billion, with 2008 expected to generate $1.8 billion in net revenue.

At their subsequent conference call, the company has confirmed the development of several new next-generation projects. The Advanced Media Network will have details pertaining to these newly disclosed projects on their applicable channels shortly.

has reported financial earnings results for the first three quarters (9 months) of its current fiscal year, which ends in March. For the first nine months of the fiscal year, the company reports are earnings increase of 22%, with pretax profit at 26.5 billion yen (US$255.6 million). Square Enix's net profit was 13.5 billion yen (US$130.2 million), and the company's sales were 73 billion yen (US$704 million).

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