SANTA MONICA, Calif., Feb. 7 /PRNewswire-FirstCall/ -- Activision, Inc. (Nasdaq: ATVI - News) today announced record financial results for the third quarter and nine months ended December 31, 2004.
Net revenues for the third quarter were $680.1 million or 34% higher, as compared to $508.5 million for the third quarter of fiscal year 2004. Net income for the third quarter rose to $97.3 million, a 26% increase, compared with net income of $77.0 million for the previous fiscal third quarter. Diluted earnings per share grew 19% to $0.63 per diluted share, compared to $0.53 per diluted share reported for the prior fiscal third quarter.
For the nine-month period ended December 31, 2004, the company announced record net revenues of $1.2 billion, an increase of 53%, as compared to net revenues of $784.8 million reported for the nine-month period last fiscal year. The company also announced record earnings per diluted share for the nine-month period of $0.87, an increase of 78%, as compared to earnings per diluted share of $0.49 for the same period last fiscal year.
Activision increased its net revenues and earnings per diluted share outlook for fiscal year 2005 to $1.352 billion in net revenues and earnings per diluted share of $0.87 from the company's prior outlook of $1.265 billion in net revenues and diluted earnings per share of $0.81. The company's revised outlook represents a 43% increase in net revenues and a 61% increase in earnings per diluted share year over year.
The company also increased its outlook for the fourth quarter of fiscal year 2005 to $150 million in net revenues from $128 million, despite moving id Software's DOOM 3 for the Xbox and the DOOM 3 PC expansion pack to fiscal 2006. For the fourth quarter, the company expects earnings per diluted share of $0.01. During the quarter, Activision plans to release Spider-Man 2(TM) and Tony Hawk's Underground 2 Remix for the PSP simultaneously with the North American release of the new handheld platform, as well as, three titles from LucasArts that will be released in Europe -- Star Wars(R) Knights of the Old Republic(R) II: The Sith Lords(TM), Mercenaries(TM) and Star Wars Republic Commando(TM). In addition, Shrek 2(TM) will be first of the company's fiscal 2005 games to enter Sony Computer Entertainment America's "Greatest Hits," Microsoft's "Platinum Family Hits" and Nintendo of America's "Player's Choice" programs.
Robert Kotick, Chairman and CEO of Activision, Inc., commented, "For the first nine months of fiscal year 2005, net revenues have already exceeded net revenues in fiscal 2004, resulting in 13 consecutive years of revenue growth for Activision. We ended the quarter with more than $713 million in cash and short term investments and for the trailing 12 months, our free cash flow was $107 million and return on invested capital was 46%. Our results to date were driven by the release of over 10 one million-unit selling games. Four of these titles sold in excess of two million units. These proven franchises should allow us to continue improving our market position domestically and internationally."
Kotick continued, "As we look toward the future, we are very excited about the opportunities ahead. The combination of our product slate, the emerging opportunities created by new hardware technologies and the ever increasing installed base of current console hardware should enable us to continue expanding our net revenues, earnings and operating margin. In fiscal 2006, we will release the strongest game slate in our history which includes new versions of our top-selling fiscal 2005 franchises -- Tony Hawk, Spider-Man, Shrek, Call of Duty, DOOM, and X-Men, as well as games based on True Crime, Fantastic Four, Madagascar, Quake, The Movies, and an original new property from Neversoft, the development team behind the Tony Hawk series."
Business Highlights
Activision's third quarter results were driven by solid performance of its titles across all platforms worldwide. During the quarter, the company had five top 10-best selling games in the U.S., according to NPD -- Call of Duty: Finest Hour(TM), which has established itself as a new console franchise for the company, Tony Hawk's Underground 2, DOOM 3(TM), Rome: Total War(TM) and Spider-Man 2 for the Nintendo DS.
Between October and December, Activision released five new games: Tony Hawk's Underground 2, an all-new Tony Hawk experience for PlayStation(R) 2 computer entertainment system, Xbox(R) video game system from Microsoft, Nintendo(R) Game Cube, Nintendo Game Boy(R) Advance and PC; Call of Duty: Finest Hour, a World War II first-person action game for the PlayStation 2 computer entertainment system, Xbox video game system from Microsoft and Nintendo Game Cube; Lemony Snicket's: A Series of Unfortunate Events(TM) for the PlayStation 2 computer entertainment system, Xbox video game system from Microsoft, Nintendo Game Cube, Nintendo Game Boy Advance and PC; Vampire(R): The Masquerade Bloodlines(TM) for the PC and Spider-Man 2 for the Nintendo DS.
Other business highlights include:
* On January 20, 2005, Activision announced that the company further
strengthened its next-generation development capabilities through the
acquisition of game developer Vicarious Visions, the creative studio
behind the #1 best-selling third-party Nintendo(R) DS title,
Spider-Man 2. Vicarious Visions' proven proprietary Alchemy(TM)
middleware technology and tools will be combined with Activision's
next-generation tools and libraries to further enhance the company's
overall development efforts.
* For calendar 2004, Activision had a number of top-selling titles:
* Spider-Man 2 was the #1 movie-based game in the U.S., according to
NPD Funworld. For the calendar year, the Spider-Man franchise
sold more than seven million units worldwide. Spider-Man 2 for
the Nintendo DS was the #1 best-selling third-party title for the
platform in the U.S. for the calendar year, according to NPD
Funworld.
* Tony Hawk's Underground 2 was the #9 best-selling title in the
U.S., according to NPD Funworld. The Tony Hawk brand sold more
than six million units worldwide in the calendar year.
* The Call of Duty franchise sold more than four and a half million
units worldwide in the calendar year and was the best-selling game
franchise based on a new intellectual property.
* Shrek 2 was the #1 best-selling children's video game in the U.S.,
according to NPD Funworld. The Shrek 2 franchise sold more than
four million units worldwide in the calendar year.
* According to NPD Techworld, Activision was the fastest growing
top-10 U.S. PC publisher for calendar 2004. The company had a 10%
PC market share, the highest in its history, and was the only
publisher to have three top-10 games for the year -- DOOM 3, Call
of Duty(TM) and Rome: Total War.
about xbox2, in the CC they mentioned that if it launches this year, "they will put out enough titles to have a significant presence on the platform around the launch"
edit: they just mentioned that they have a new IP coming from Neversoft this year that they're going to support very aggresively.