The company, which works within a very cyclical industry, swung to a second-quarter profit, with net income of $0.7 million, or break-even earnings per share. Excluding compensation expenses, it earned $4.9 million, or $0.02 per share. That stacks up against a net loss of $21.3 million, or $0.08 per share, this time last year. Activision's revenues increased 69% to $317.7 million. (Grab the cheat codes of the previous quarter by reading our earnings take.)
Activision raised its fiscal 2008 guidance to revenues of $2.07 billion and earnings of $0.55 per share, excluding compensation expense. Activision also boasted of its successful launch of Guitar Hero III: Legends of Rock, which has generated more than $115 million in sales in its first week. Although rival Electronic Arts
It's good to be the leaders in a hot industry; Electronic Arts reported a decent quarter, too, according to longtime Fool Rick Munarriz, and is surely better positioned now that it's caught up with titles for the Wii for the holiday season. Both Electronic Arts and Activision have been recommended by David Gardner for Motley Fool Stock Advisor, and part of the investment thesis has touched on their roles as industry leaders.
Speaking of which, some other video-game companies don't seem as strong right now. Midway
It's admittedly a bit disappointing that Activision's strong sales didn't translate into higher profits. However, Activision's strong position in the industry gives me the distinct impression that despite any near-term negativity, this stock's still got game for the long term.