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Activision Q2 revenues up 69 per cent

Activision has announced financial results for the second fiscal quarter ended September 30, 2007, with a 69 per cent in net revenues

Activision has announced financial results for the second fiscal quarter ended September 30, 2007, with a 69 per cent in net revenues.

Net revenues for Q2 were a record USD 317.7 million, as compared to net revenues of USD 188.2 million reported for the same quarter last fiscal year.

Net income for the second fiscal quarter was USD 0.7 million, or break-even earnings per share, as compared to a net loss of USD 24.3 million, or a loss per share of USD 0.09 reported for the second quarter of last fiscal year.

Excluding the impact of expenses related to equity-based compensation, the company had net income of USD 4.9 million and earnings per diluted share of USD 0.02 for the second quarter.

"Our second quarter net revenues were the highest in our company's history and we ended the quarter with USD 962 million in cash and short-term investments," said Activision chairman and CEO Robert Kotick.

"We significantly strengthened our development capabilities through our acquisition of Bizarre Creations, a proven top-tier developer of racing games which will facilitate our entry into this important segment."

"During Q3, we shipped more units of our internally developed, wholly owned franchise, Guitar Hero III: Legends of Rock, than any other game in Activision's history. Within the first seven days, consumer sell through was more than USD 100 million in North America alone -- our largest product launch ever."

Call of Duty 4: Modern Warfare launches tomorrow, and all of the company's holiday titles in North America will be in retail distribution by mid-week. Kotick noted that Activision was the only major publisher not to delay a planned holiday release.

Activision expects its first-ever billion dollar quarter in Q3, with net revenues expected to reach USD 1.05 billion.

The company increased its fiscal year 2008 net revenues and earnings per share outlook. For the full fiscal year, the company expects net revenues of USD 2.07 billion and earnings per diluted share of USD 0.55.

For the back half of the fiscal year, Activision expects that the acquisition of Bizarre Creations will be dilutive by approximately USD 0.02 - 0.03 per share, which has been incorporated into the above fiscal year outlook.

UPDATE: In a conference call to investors, Kotick suggested that the company might not be able to meet the demand for Guitar Hero III on every platform this holiday season. The company has more than tripled the number of in-store kiosks demonstrating the game at retail.

Guitar Hero III will be launched in Europe this month, and will offer localised music content for the first time.

Kotick said that recent hardware price cuts would provide the company with greater opportunities. In 2008, the company anticipates growth of 4-5 million units for both the Xbox 360 and the PS2, 5-6 million units for the Wii, and 3 million units for the PS3.

Upcoming Activision titles include an as-yet untitled James Bond game, games based upon the Kung Fu Panda, Monsters vs. Aliens, and Madagascar 2 films, new Call of Duty and Tony Hawk titles, and two unnamed superhero releases.

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Mark Androvich