Activision Swings to a Loss

A week second-quarter outlook takes the shares lower in after-hours trading.
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(ATVI) - Get Report

swung to a first-quarter loss Thursday on sales that were still well ahead of analysts' expectations. The company also raised guidance for the full year.

However, with its second-quarter outlook a bit shy of expectations, shares of Activision recently declined slightly to $18.74 in after-hours trading after closing down 23 cents, or 1.2%, at $18.97.

The Santa Monica, Calif.-based video-game maker reported a loss of $3.6 million, or 2 cents a share, in the first quarter, which ended June 30. That was a penny higher than the consensus estimate and company's target, which it lowered three months ago. It also reversed net income of $12 million, or 6 cents a share, in the same period a year earlier.

Activision, which publishes such popular franchises as

Tony Hawk


Call of Duty

, said revenue rose 14% to $241.1 million from $211.3 million a year earlier. That handily beat the consensus estimate of analysts calling for $203.9 million in sales, slightly higher than the company's $200 million target.

Activision on Thursday raised its sales guidance for fiscal 2006 to $1.47 billion -- from a prior target of $1.43 billion -- and increased its earnings target by a penny to 69 cents a share. The most recent consensus estimate projected earnings of 69 cents on sales of $1.45 billion in fiscal 2006, which ends in March.

The company said it expects second-quarter revenue of $200 million and a loss of 10 cents a share, third-quarter revenue of $790 million and earnings of 69 cents a share, and fourth-quarter revenue of $240 million and earnings of 9 cents a share. Analysts were forecasting a loss of 9 cents a share on $205.8 million for the second quarter, a gain of 69 cents a share on $795.2 million in third-quarter sales, and a gain of 9 cents a share on $245.8 million in fourth-quarter sales.