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Activision Raises Q4 Outlook, Doubles Wii Support

After lowering its expectations for its Q4 results last month, Activision has now raised them by $30 million, following increased optimism over the availability of hardware during the European PS3 launch, while also promising to double support for the DS
Following the announcement of the company’s preliminary third quarter results last month, officials from Activision have announced that the publisher is raising its fourth quarter revenue outlook based on new optimism regarding greater hardware shipments for the European launch of the PlayStation 3. The company’s third quarter results, which are still described as preliminary, describe a profit rise from $67.9 million to $124.8 million, while revenues rose from $816.2 million the previous year to $822.8 million. At the time of its January preliminary results the company reduced its fourth quarter expectations from $175 million to $170 million, following the expected impact of legal expenses relating to its internal review of stock option practices and the delay of Enemy Territory: Quake Wars. In its latest report, though, the company has raised the fourth quarter outlook to $200 million, with loss forecasts also narrowed from 9 to 8 cents a share. For the nine-month period ended December 31, 2006, the company expects net revenues of $1.20 billion, a fall compared to the $1.28 billion of the previous year. Earnings per diluted share for the nine months is expected to increase by 76 percent, from $0.17 to $0.30. For the full fiscal year, the company has increased its net revenue outlook from $1.37 billion to $1.40 billion. The company has also raised its diluted earnings per share outlook for the year to $0.21. Activision also revealed that it expects Sony will be able to add four million PlayStation 3s to its already installed North American user base this calendar year, with the publisher expecting Microsoft to sell another 4 million Xbox 360 consoles and Wii 4 million. Also of note during the company’s conference call to analysts: Activision CEO Bobby Kotick announced that the company would be doubling its support for the Wii and Nintendo DS, commenting that Activision "will double our product offerings on Wii and DS", in a similar fashion to recent statements from Electronic Arts. After also mentioning a port of Wii exclusive Tony Hawk’s Downhill Jam to the PlayStation 2, he added: "To date, there has been strong consumer response to all three next-generation consoles, which truly are delivering new gaming experiences to broader, more diverse audiences than ever before."

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