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Activision Quarterly Net Surges on Sales

October 30, 2002|Alex Pham | Times Staff Writer

Powered by continued strength of its "Spider-Man" video game, Activision Inc. posted a fourfold increase in net income on record fiscal second-quarter sales.

The Santa Monica game publisher recorded net income of $9.1 million, or 13 cents a share, in the quarter ended Sept. 30, up from $2.2 million, or 4 cents, a year earlier. Analysts surveyed by Thomson First Call had expected Activision to earn 10 cents a share. The nation's second-largest game publisher saw a 21% jump in sales from a year earlier to $169.2 million.

Activision Chief Executive Robert A. Kotick increased the company's revenue forecast for the fiscal year ending March 31 to $934 million from $920 million. He also boosted net income projections to $1.29 a share from $1.25.

Shares of Activision, which released its results after the stock market closed, lost a penny to $18.21 on Nasdaq but rose to $19.61 in after-hours trading.

Kotick also estimated that sales of game software for the overall industry would grow 18% to 20% in 2002, followed by a 13% to 17% growth in 2003. The estimate fell in between projections made last week by THQ Inc., which estimated a 10% to 15% growth next year, and Electronic Arts, which held a 20% overall growth target for the industry in 2003.

Industry analysts say the lower estimates result from a lower average price for games. As more consoles penetrate into mainstream living rooms, consumers tend to be more price-sensitive.

"When industry becomes more mass market, you have a decrease in the average price of software," said Simon Price, analyst with International Development Group in San Francisco.

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