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Activision Sees Better-Than-Expected Q2 Loss

Major publisher and developer Activision announced decreased fiscal Q2 2006 results, including a loss, that nonetheless topped analyst estimates, after this year's quarte...
Major publisher and developer Activision announced decreased fiscal Q2 2006 results, including a loss, that nonetheless topped analyst estimates, after this year's quarter failed to top last year's Spider-Man 2 game-laden success. Overall revenues for Activision were $222.5 million, an increase of $22.5 million from the company's prior outlook of $200 million, but far less than last year's $310.6 million. Net loss was $13.2 million, as compared with a net income for the second fiscal quarter last year of $25.5 million. According to the firm, Activision's second quarter results were driven by sales of major releases Ultimate Spider-Man, X-Men Legends II: Rise of Apocalypse and World Series of Poker, although it did not specifically mention sell-through milestones. Robert A. Kotick, Chairman and CEO of Activision, commented of the results: "Our second quarter revenues and earnings exceeded our expectations, despite having difficult year-over-year comparables. To date, seven of our games have shipped more than one million units each. We remain focused on big propositions and in the third quarter will release the strongest holiday slate in our history. We are optimistic about our holiday titles, although we remain cautious of the many variables that can affect the holiday selling season and our own performance." Going forward, Activision's third quarter slate will be driven primarily by what it describes as "proven franchises", which include Tony Hawk's American Wasteland, Call of Duty 2, Quake 4, True Crime: New York City, and Shrek SuperSlam, as well as Neversoft's much awaited new IP Gun and Lionhead's finally debuting The Movies. For the full fiscal year, Activision raised its net revenue outlook to $1.48 billion from $1.47 billion, but otherwise left profit predictions unchanged. The company also revealed new games including X-Men 3, to debut alongside the film next year, and a companion game to Dreamworks' forthcoming CG movie Over The Hedge. The firm's shares closed up on the day at $16.81, but dipped a little in post-close trading, down almost 3 percent to $16.32.

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