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Activision expected to swing to profit on strong game sales Part 2
May 08, 2008 13:48:45
This will likely be the last quarter for Activision as a stand-along company before it completes its merger with Vivendi's video game unit Blizzard Entertainment, which owns the rights to the popular "World of Warcraft" online multi-player game. The deal -- valued at nearly $19 billion -- was announced in December and is expected to close before the end of June. See full story. Tough comparisons Analysts will also be watching closely for the company's forecast for its first fiscal quarter, which ends in June. The challenge for Activision will be maintaining the same strong growth against a comparison with a very strong period last year, when the company had on the market several of its best-selling game titles on the market. These included the previous "Guitar Hero" iteration as well as movie tie-ins to summer blockbusters such as "Spider-Man 3," "Shrek the Third" and "Transformers." Wall Street is currently predicting a slight decline in sales for the period, with revenue expected to come in at $484.3 million compared to $495.5 million last year. Earnings are expected to remain roughly flat for the quarter. "While we think Activision could do as much as $400 [million]-$450 million in [the first quarter], year-over-year growth will be difficult because of the tough comparison," Signal Hill analyst Todd Greenwald wrote in a note to clients. Greenwald said Activision could get a boost from a version of "Guitar Hero" being launched during the period for the Nintendo DS. It will be the first version of the game available for a handheld device.
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