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Activision raises '07 sales goal after beating forecast

January 26, 2007|From Bloomberg News

Video game maker Activision Inc. said Thursday that its fiscal third-quarter sales beat its forecast, and it raised its 2007 revenue projection.

The Santa Monica company also said it would restate as many as 15 years of earnings reports because of misdated option grants.

Preliminary figures for the quarter, which ended Dec. 31, indicate the company had a profit of 41 cents a share on revenue that rose to $822.8 million, topping a Nov. 6 forecast for $600 million.

A year earlier, profit was 23 cents a share on sales of $816.2 million, although the earnings figure is subject to change pending restatements to properly account for stock options.

Sales in the current fiscal year are forecast to reach $1.37 billion, up from the $1.15 billion forecast in November, and profit is forecast to be 20 cents a share, including stock compensation costs of 5 cents, the company said.

For the current quarter, Activision forecast a loss of 10 cents a share on sales of $170 million, partly because of higher legal expenses related to the stock option probe.

Evan Wilson, an analyst at Pacific Crest Securities in Portland, Ore., said video game publishers were benefiting from enthusiasm surrounding Sony Corp.'s PlayStation 3 and Nintendo Co.'s Wii consoles.

The preliminary results topped average estimates of 28 cents a share, excluding some costs, on revenue of $610.8 million, according to data compiled by Bloomberg.

Activision shares jumped as much as 5% to $18 in late trading. They had fallen 99 cents to $17.12 in regular trading.

Previous financial statements back to 1992 can no longer be relied on because of misdated option grants that will require restated results, Activision said. The company said it would not be able to file complete financial reports until the changes were made.

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