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.

"Video games as an entertainment medium is probably the lowest cost per hour," Kotick said.

When the Vivendi deal closes, Activision Blizzard will be worth $18.9 billion and draw significant revenue in Asia with "World of Warcraft," the world's most popular online game. The deal already has won EU regulatory approval and cleared U.S. antitrust hurdles.

"The beauty of the transaction is that it puts all of the markets, platforms and geographies that video games are consumed on in one place," Kotick said.

For the first quarter of fiscal 2009, Activision forecast earnings of 4 cents per share on sales of $500 million, excluding any contribution from Vivendi. Excluding stock options costs and expenses from the Vivendi transaction, it expects adjusted earnings of 13 cents per share.

Analysts surveyed by Thomson forecast a profit of 12 cents a share on sales of $484.3 million.

For the full fiscal year, the company earned $344.9 million, or $1.10 per share, up from a profit of $85.7 million, or 28 cents per share, the year before. Revenue grew 93 percent to $2.9 billion from $1.51 billion.

For the current fiscal year, Activision expects earnings of 72 cents per share, or $1.30 per share excluding Vivendi Games. The company expects sales of $2.75 billion. Not counting the effects of deferred revenue for online-enabled games, revenue is expected to total $3.1 billion for the year. Activision, like other video game companies, makes most of its money during the holiday season.

Analysts are predicting earnings of $1.18 per share on sales of $2.82 billion.

Activision shares rose 90 cents, or 3.3 percent, to $28.60 in after-hours electronic trading. The stock had closed up 21 cents at $27.70.

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