The video game publisher reported a wider-than-expected quarterly loss of $14.4 million, or $0.05 per share, compared to last year's loss of $9.1 million, or $0.03 per share. However, Activision's revenues were quite impressive, jumping 66% to $312.5 million.
In the conference call, Activision pointed out that it's the only company to be a top three publisher for both the Nintendo (OTC BB: NTDOY.PK) Wii and Sony's
Activision emphasized several game launches, many of which coincide with very successful existing franchises or summer blockbusters. Activision released Guitar Hero 2 for Microsoft's
Activision raised its revenue guidance to $1.8 billion for fiscal 2008, and that speaks to the strong slate of product launches it has at the moment. The company also expects to increase operating income by 100% this year, and forecast earnings of $0.45 per share, including the impact from share-based compensation. Furthermore, there's lots of cash on the balance sheet ($954.8 million at the moment), and that should help it make strategic moves as the market continues to grow and evolve.
It's easy to see why investors might be forgiving of Activision's wider fourth-quarter loss. After all, a couple of successful years seem to be on tap, with double-digit increases in earnings and revenues anticipated. Given the cyclical nature of video game publishers, it makes sense not to sweat the short term as long as the long term seems to be on track.
For related Foolishness, see the following articles:
- Rich Smith took a pre-earnings peek at Activision, and how it's received in the Motley Fool CAPS community.
- Revisit Activision's third quarter.
- We reviewed Activision for 2006.