Activision Slips; Guidance Doesn't Support Strong Results

The video game software maker reverses a loss as sales climb 30%.
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Updated from 4:48 p.m. EDT

Better-than-expected sales helped

Activision

(ATVI) - Get Report

reverse a year-ago loss in its fiscal fourth quarter.

After the bell Thursday, the video game software maker reported net income of $6.66 million, or 4 cents a share, in its quarter ended March 31; in the fourth quarter last year, the company lost $7.96 million, or 6 cents a share. The company's sales grew 30.3% to $162.90 million.

The results topped both Wall Street's estimates and the company's guidance, which it

upped last month. Analysts polled by Thomson First Call had predicted the company would earn a penny a share on sales of $146.72 million. Activision projected a penny a share in profits on sales of $155 million.

Despite blowing through earnings and revenue projections in its fourth quarter, Activision was more cautious about the coming year. In its fiscal first quarter, for instance, the company now expects to earn 4 cents a share on sales of $185 million.

While that guidance is up from the company's previous estimate of a 3 cent per share profit on $170 million in sales, the bottom line falls a bit short of analysts' expectations. Wall Street had forecast that the company would earn 5 cents a share on sales of $178.93 million.

Likewise, the company's full-year profit expectations didn't match up to analysts' forecasts. The company now expects to earn 64 cents a share on $1.05 billion in revenues in fiscal 2005. That's up from Activision's previous guidance of 60 cents a share in profits on $1 billion in sales. But Wall Street was looking for even better results: 66 cents a share in earnings on sales of $1.05 billion.

In its just-completed fiscal year, Activision earned $77.72 million, or 54 cents a share, on $947.66 million in sales.

In recent after-hours trading, Activision's stock was down 68 cents, or 4.3%, to $15. The company's shares ended regular trading up 23 cents, or 1.5%, to $15.68.