Profit drop at vidgame publisher
Shares in Activision were down 7% in after-hours trading as the No. 2 videogame publisher reported holiday earnings that disappointed investors even after the company warned in December that it would miss guidance.
Revenue in the quarter was up 20% to $816.2 million, above Activision’s estimates. But company’s profit was down a sizable 30% at $67.9 million — less than half the guidance provided in November.
CEO Bobby Kotick blamed the overall industry slowdown that also caused giant Electronic Arts’ earnings to slump last quarter. In addition, however, Activision had some games that sold poorly, most notably “True Crime: New York City.”
Activision also provided disappointing guidance for fiscal 2007, which starts April 1. Publisher is expecting net revenue just over $1 billion — down significantly from the more than $1.4 billion it’s expecting for the year ending March 31.
Meanwhile, publisher THQ also had a weak quarter but didn’t disappoint Wall Street. While sales and profit were down significantly, at $357.6 million and $47.6 million, respectively, company came out ahead of guidance.
THQ is looking for a healthy boost in revenue from $790 million for the fiscal year ending March 31 to $900 million-$950 million for the fiscal year starting April 1.
Shares in THQ rose 1% to $26.54 Friday after earnings were announced, while Activision stock was trading at $13.34 after hours Monday.