The game isn't over for Activision
Watching the video game publisher sport a modest deficit on a 31% slide in revenues for the period doesn't appear all that encouraging until you factor in the sector's seasonality and the company's deliberate reduction in title releases.
Like most plaything purveyors, the video game sector lives for the upcoming holiday shopping season. Activision is looking to earn $0.45 a share in the current quarter -- more than it will earn all year. It has also backed off from its Nintendo console support, favoring the more popular Sony
The attractive wink of the video game software industry is what led David Gardner to single out Activision as an intriguing stock idea in Stock Advisor. In a sector dominated by the rich valuation multiples of acquisition-happy Electronic Arts
After a charge to write off cancelled titles, Activision is now looking to earn $0.34 a share this fiscal year on $780 million in revenues. While that's a dip from last year's performance, next year looks promising as the company will be putting out games to coincide with the theatrical sequels for Spider-Man and Shrek -- properties that have served the company well.
With its clean balance sheet ripe with $4.67 a share in cash, along with the potential for some additional holiday upside as its latest Tony Hawk installment becomes a popular stocking stuffer, keep an eye on any buying opportunities that might occur from investors who misread the company's second-quarter results as a form of surrender. It's not. In many ways, this is a game that is only beginning.Are you excited about Activision's holiday lineup? Tony Hawk fan? Pumped about True Crime? Is there more to the sector than EA? All this and more -- in the Video & PC Games discussion board. Only on Fool.com.