Street’s not game as Activision dips

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.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety

Loading