Video game publisher Activision ( ATVI) expects to report third-quarter results above analysts' expectations, helped by the release of the latest game consoles and a strong lineup of games during the holiday season.

The company said revenue for the quarter ended Dec. 31 grew to $822.8 million from $816.2 million for the third quarter of last fiscal year and the company's prior outlook of $600 million. Analysts had been expecting revenue of $618.19 million.

Excluding the impact of equity-based compensation, the company expects earnings of 42 cents for the fiscal third quarter, compared with analysts' expectations of 28 cents a share.

The results do not take into account any adjustments for additional expenses that may be required in connection with the company's ongoing review of its historical stock option grant practices.

Shares of Activision were up 58 cents, or 3.4%, to $17.70 in extended trading.

The third-quarter results were driven by four key games: Call of Duty 3, Marvel: Ultimate Alliance, Tony Hawk's Project 8 and Guitar Hero II.

Activision also reported additional results for the fiscal second quarter ended Sept. 30. The company said it still expects to post revenue of $188.2 million for the second quarter, down from $222.5 million a year earlier. Analysts had been expecting revenue of $185.23 million.

Excluding the impact of equity-based compensation, the company expects to report a loss of 5 cents a share for the fiscal second quarter, compared with analysts' expectations of a loss of 9 cents a share.

For its fourth quarter, the company expects revenue of $170 million and a loss of 10 cents a share, including equity-based compensation of a penny a share.

Activision said it believes fourth-quarter results will be significantly hit by higher legal expenses relating to its internal review of historical stock option practices, including expenses relating to the previously announced informal SEC inquiry and derivative litigation, and its decision to move the release of its game Enemy Territory: Quake Wars into fiscal 2008.

For fiscal year 2007, Activision increased its revenue outlook to $1.37 billion, compared with its prior outlook of $1.15 billion. Excluding the impact of equity-based compensation, the company expects to earn 25 cents a share, 10 cents above its prior outlook.

The company reaffirmed its outlook for fiscal year 2008 revenue, which is expected to exceed $1.6 billion.

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