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Earnings at



fell 46% in its fiscal fourth quarter. While the company's results nominally topped expectations, the company lowered its outlook for its current quarter.

The company's report resembled those issued by rival video-game publishers

Electronic Arts





over the last two days. In a somewhat muted way, investors repeated their reactions to those reports, trading off Activision shares following the announcement. In recent after-hours trading, the company's stock was off 1.4%,

In the quarter ended March 31, Activision earned $3.57 million, or 2 cents a share. That result was down from the $6.66 million, or 4 cents a share, the company earned in the same quarter a year earlier.

Sales were up 25% to $203.86 million.

But the company's quarter was worse than it looked. Activision actually posted an operating loss of $2.9 million as operating costs rose 31%, outpacing sales. The company was able to post a net profit thanks to $5.1 million in investment income and a $1.3 million income tax credit, compared with $2.1 million in investment income last year and $29,000 in incomes taxes paid.

Thanks to those boosts, the company's results topped the Street's estimates. The consensus sell-side forecast was for a penny a share in earnings on $155.9 million in sales, according to Thomson First Call. In February, the company

predicted earnings of a penny a share on sales of $150 million.

In its current first quarter, Activision now expects to lose 3 cents a share on $200 million in sales. For the full year, the company is predicting a profit of 68 cents a share on $1.43 billion in sales.

Both the near-term and full-year forecast were below expectations. Analysts had predicted Activision would earn 2 cents a share on revenue of $220.7 million in its first quarter and 71 cents a share in profits on sales of $1.45 billion for the full year. The company had previously forecast that it would earn 2 cents a share in the current quarter on $215 million in sales.

In the first quarter a year ago, Activision earned $12 million, or 6 cents a share, on $211.3 million in sales. In its just-completed fiscal year, it earned $138.3 million, or 66 cents a share, on $1.41 billion in sales.

The company's stock closed regular trading up 15 cents, or 1%, to $15.03.