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Clarification: Activision earnings story

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The Associated Press
Friday, May 9, 2008; 2:30 PM

NEW YORK -- In a May 8 story about Activision Inc.'s earnings, The Associated Press reported that the company expected earnings of $1.30 per share after excluding Vivendi Games. The story should have said the adjusted earnings excluded other items as well.

A corrected version of the story appears below.

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NEW YORK (AP) _ Video game publisher Activision Inc.'s fiscal fourth quarter was exceptional, with sales of "Guitar Hero III" and "Call of Duty 4" pushing profit and revenue well above guidance and analyst estimates.

Activision said Thursday its acquisition by Vivendi SA is on track to close in the next few weeks. The new publicly held company, to be called Activision Blizzard, will rival Electronic Arts as the world's largest video game publisher. Vivendi will hold a 52 percent stake.

For the three months ended March 31, Activision earned $44.2 million, or 14 cents per share, compared with a loss of $14.4 million, or 5 cents per share, in the same period a year earlier.

It was the company's most profitable quarter outside the holiday season.

Excluding stock options costs, Activision earned $54.9 million, or 17 cents per share, far more than the 5 cents per share that analysts polled by Thomson Financial expected.

Revenue jumped 93 percent to $602.5 million from $312.5 million, beating analysts' average projection of $369.1 million _ and topping Activision's own guidance of $350 million.

Noting that the company had no new releases during the quarter, Chief Executive Bobby Kotick said the results show the power of Activision's "Guitar Hero" and "Call of Duty" franchises.

The video game marketplace is thriving, even as U.S. consumers are cutting back spending in other areas. Games, Kotick told The Associated Press, "are starting to capture the hearts and minds of the broadest audiences."

The latest generation of customers, he said, expect that video games can be an important part of their leisure time, even during an economic slump: In the past year alone, Americans spent nearly $18 billion on video games.

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