Ubisoft Shares Jump After Guidance Increase

Shares in French publisher and developer Ubisoft have increased by as much as 10 percent in Paris trading, after the company raised its full year guidance following better than expected performance of the recently released Rainbow Six: Vegas 2. The company yesterday raised its full year guidance from €857 million ($1.35bn) to €920 million ($1.45bn). The company also raised its fourth quarter guidance from €165 million ($260.5m) to €210 million ($331.5m), following the success of both the latest Tom Clancy title and previously released Assassin’s Creed. In early morning Paris trading stock prices were up by 6.7 percent to €58.25, their highest level for more than a month. According to Bloomberg, Ubisoft shares have risen by 49 percent over the past year, compared to a 1 percent drop for rivals Electronic Arts. The recently announced acquisition of the rights to the Tom Clancy name, the associated games of which account for 30 percent of Ubisoft’s sales, have also had a positive effect on the company’s stock which rose by another 10 percent last month. [UPDATE: In a note to investors, Wedbush Morgan's Michael Pachter added of his own guidance following Ubisoft's update: "We are maintaining our FY:09 estimates for revenue of €1.050 billion (13% growth) and EPS of €2.25 (29% pro forma EPS growth, significantly above management guidance). Our FY:09 estimates reflect the shifts of several games into the second half (Brothers in Arms and Splinter Cell Conviction). Ubisoft’s recent sales have been strong which should provide momentum for catalog sales in FY:09. In addition, the company’s recent acquisition of the Tom Clancy name rights should improve operating margins. Company revenue guidance implies top line growth of only 9%, while we expect industry growth of 20% and believe that Ubisoft has a very strong lineup in FY:09. Accordingly, we think that there is significant room for upside."]