Activision Takes on a Mega-Merger

In early June, the company will release Kung Fu Panda, in conjunction with the Dreamworks'(DW Quote) movie of the same name. Other movie-based games include Madagascar 2, Monsters vs. Aliens and a title based on the upcoming James Bond movie.

In the second half of June, Activision will launch its game Guitar Hero on Tour for the Nintendo DS handheld console. The company has hinted at bringing new innovation to the franchise, which industry watchers say could include new music peripherals.

Activision stable franchises such as Call of Duty and Tony Hawk are also expected to be revamped to make them bigger and better.

Even without Vivendi Games, Activision's line-up is enough to inspire investor confidence, says Romeo Dator, co-manager of the Holmes Growth Fund(ACBGX Quote).

"As long as there are no delays in product releases because of the merger, Activision should be fine," he said.

Shares of Activision gained $3.15, or 11.3%, to $30.83 after the company blew past analysts' estimates for the fourth quarter.

Activision reported net income of $44.2 million, or 14 cents a share in the fourth quarter, compared with a net loss of $14.4 million, or 5 cents a share, the same quarter year-before. Excluding charges, it posted earnings of 17 cents a share in the fourth quarter, compared with a net loss of 4 cents a share a year ago. Revenue rose 92.8% to $602.5 million.

The results topped Street expectations of 5 cents a share in earnings on revenue of $373.12 million.