'Hero' helps double Activision profits
Videogame bolsters company's strong quarter
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Activision, which recently merged with Vivendi Games to form Activision Blizzard, reported a $59 million profit on $654.2 million in revenue.
Though it didn't break down sales figures, Activision said "Kung Fu Panda" was its biggest launch yet for a game based on a DreamWorks Animation pic. Companies have had a licensing arrangement since the toon studio went public in 2004.
"Guitar Hero: Aerosmith" and "Guitar Hero: On Tour" also had strong debuts, with the latter ranking as the No. 1 title in the U.S. in revenue terms for Nintendo's DS handheld system during the quarter.
Company also noted that fall's hits "Guitar Hero III" and "Call of Duty 4" continued to sell well in the spring quarter.
For next fall, it has an expansion of Blizzard's megahit "World of Warcraft," which came with the Vivendi merger, along with new versions of "Call of Duty," "Guitar Hero" and "Spider-Man" as well as games based on the James Bond pic "Quantum of Solace" and DreamWorks' "Madagascar: Back 2 Africa."
It is also releasing two games from Vivendi's slate based on classic franchises "Crash Bandicoot" and "Spyro the Dragon." However, it decided not to publish Vivendi's planned "Ghostbusters" game and new original title "Brutal Legend" (Daily Variety, July 30).
For the current quarter, its first post-merger, Activision Blizzard is expecting $636 million in revenue and a net loss of 26¢ per share. Loss is based entirely on merger costs and losses from Vivendi Games businesses it plans to exit. Without those impacts, profit would be 8¢ per share, compared with 18¢ per share last quarter. Company has no major releases this quarter.
During the crucial holiday quarter, it's expecting an 11¢ per share profit on $1.85 billion in revenue. Without the merger costs and Vivendi Games losses, as well as revenues it is deferring for online enabled games, profit would be 64¢ per share.
Activision Blizzard also announced that it is shifting its fiscal year, which used to end in March, to coincide with the calendar year.
Shares in Activision were down 2% in after-hours trading after closing up slightly at $35.98.
In other videogame news, midsize publisher THQ saw its shares fall 5% Thursday after reporting that its net loss tripled in the quarter to $27.2 million on revenue of $137.6 million, up 31%. Its game based on the Disney/Pixar toon "Wall-E" sold more than a million units but slightly disappointed some on Wall Street who were hoping for an even bigger success. Game sold better than last year's disappointment "Ratatouille" but is behind 2006's "Cars."
THQ also slightly lowered revenue guidance for the fiscal year ending in March to between $1.15 billion and $1.175 billion.
