Strong holiday business at video game software company and Motley Fool Stock Advisor recommendation Activision (NASDAQ:ATVI) appears to have continued into the New Year. After turning out three of the five hottest titles of the holiday season, the company raised financial guidance for its fiscal fourth quarter and full year.
Activision, known lately for titles such as True Crime: Streets of L.A., Call of Duty, and Tony Hawk's Underground, said it expects earnings per share (EPS) of $0.01 on $155 million in sales for the fourth quarter. It previously expected a loss of a penny and $30 million less in revenue; last year, the company lost six cents per share on $125 million in sales.
For the year, meanwhile, it now expects 16% EPS growth (to $0.50) and sales of $940 million, up 9% year over year. Previous guidance for the full-year figures was $0.48 and $910 million.
Investors could probably have predicted a strong close to the fiscal year for the hot company, shares of which have trounced the S&P 500 over the last 12 months. Strong new titles and lower console prices have helped companies such as Activision and sector leader Electronic Arts (NASDAQ:ERTS) even as the wait for the next-generation machines from Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT) begins to intensify. Solid holiday numbers from retailers like GameStop (NYSE:GME) and Electronics Boutique (NASDAQ:ELBO), both subjects of recent Fool coverage, illustrate this.
Unsurprisingly, the video game software business tends to slow in the warm-weather months; many key releases are timed for the holidays and people are expected to spend more time outside in spring and summer. (Sports game interest could conceivably get a boost this year, what with the Summer Olympics as well as the European soccer championship.) But by closing out its fiscal year with such strong numbers, Activision has staked itself to a banner calendar year.
Talk about Activision's holiday windfall on our Activision discussion board.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story, but he does own a PlayStation 2.
