The California-based publisher reported a profit of $44.3 million for the three months ended December 31, up from $39.1 million in the same period last year. Analysts had anticipated a drop in profits, and the quarter also outperformed Activision’s own estimates, which it revised downwards on December 17.
The company now expects to report earnings per share of 91 cents (around $64 million in profit) for the full year, on revenues of $839 million – again outperforming analyst expectations. However, this trend does not seem likely to continue into fiscal 2004, as the company has announced that it is reducing its guidance for next year, and expects significantly reduced revenues of $750 million for the year.
However, the company still anticipates 10 per cent sales growth of video game software in the USA and Europe over the coming year. The lowered expectations seem to be mostly because of the company’s new operating model, which will see fewer games produced but significantly more time and development resources ploughed into each one.
This new model has been adopted in reaction to increasing pressure on space in key retailers, which is making the scattergun approach adopted by many publishers difficult to pull off. This was particularly notable this Christmas in the UK, where apart from exceptional titles from Take 2 and SCEE, the entire market was dominated by Electronic Arts games – a reflection of EA’s ability to push its products effectively into limited retail space as much as anything else.
Activision also announced that it has bought back just fewer than two million shares of its own stock in the past three months.
Source: Gamesindustry.biz
