Activision is raising its revenue and earnings outlook for its third quarter ending December 31 and fiscal year 2008 as a result of better than expected holiday sales worldwide.
Activision is now expecting a record $1.225 billion net revenue for the third quarter, with earnings per diluted share of $0.66. These numbers represent a significant increase over the company's earlier projections of $1.050 billion net revenues and $0.51 per diluted share. For the full fiscal year 2008, the company has raised its net revenue projections to $2.30 billion, up from earlier estimates of $2.07 billion, while diluted share earnings estimates have jumped from $0.55 to $0.75.
Driven by the success of its Guitar Hero III: Legends of Rock release, Activision was the top U.S. console and portable software publisher, holding 28.7 percent of the U.S. market share, a record high for the company. Guitar Hero III was reported by the NPD Group as the top-selling game across all consoles in October, despite being available for only the final week of the month.
"We are well on our way to delivering our 16th consecutive year of revenue growth and the most profitable year in our history," said Activision CEO Robert Kotick. "We are confident that the third quarter of fiscal 2008 will be the largest and most profitable quarter ever. Guitar Hero III: Legends of Rock and our newly released Call of Duty 4: Modern Warfare already are two of the biggest entertainment titles this year. Due to the strong consumer response to our slate through October and strong retail sales over the Thanksgiving weekend, we are raising our financial outlook for the December quarter and the fiscal year."
"As an organization we continue to exceed our growth goals. This year, we expect that we will generate operating margins in our peak cycle target range, which is about two to three years ahead of plan. We continue to strengthen and grow our franchise portfolio and internal development resources with new brands like Guitar Hero and Transformers and the acquisition of Bizarre Creations. This combined with our market momentum and the expanding installed hardware base worldwide, should enable us to continue growing our top and bottom line results through the remainder of this console cycle," he said.