The more I look at it, the more I like it. Like competitors Electronic Arts
In the fourth quarter, Activision's revenues jumped 30% to $162.9 million, helping to turn last year's $8 million loss into a $6.7 million, or $0.04 per share, profit. Though the company released three new titles in the quarter, the primary growth driver was spillover demand for holiday smash hitsTony Hawk's Underground, Call of Duty, and True Crime: Streets of L.A.
Like THQ yesterday, Activision raised its own guidance, though, more modestly.
For fiscal 2005, the company now expects to earn $0.64 per share on $1.05 billion in sales, after earning $0.54 per share on $947.7 million in sales in fiscal 2004. Factored into those growth targets is a sequel to Tony Hawk: Underground, which would be the sixth in the dominant skateboarding franchise.
In addition, Activision expects significant contributions from a port of top PC title Call of Duty to the Microsoft
Naturally, those earnings will be weighted towards the holiday quarter. Activision forecasted first-quarter earnings of $0.04 per share. Also, on the conference call (transcript provided by CCBN Street Events), the company said that second-quarter profits would amount to $0.06 per share.
Of note, Activision also expects the highly anticipated price cut of Sony's
Activision didn't blow anybody away with its fourth-quarter performance, but the company managed to turn a decent profit without doing anything spectacular. That says something in what was a fairly typical, seasonally weak quarter. Call it a sign of maturity.
David Gardner likes Activision. Take a trial spin of Motley Fool Stock Advisor risk free. Or just give us your take on the Activision and Video & PC Games discussion boards.
Fool contributor Jeff Hwang owns shares of Electronic Arts.