Activision Blizzard, Inc (ATVI)Activision Raises Forecasts On Guitar Hero SalesGamasutra - November 27, 2007
Submitted by wetain (823)
at 6:28AM PST on November 27, 2007
Officials from Activision have raised the company’s third quarter and fiscal 2008 earnings and revenue predictions thanks to strong sales of Guitar Hero III: Legends of Rock and Call Of Duty 4: Modern Warfare.
The publisher is now expecting third quarter profits of $0.66 per share on revenue of $1.225 billion, up from previous forecasts of $0.51 per share and revenues of $1.050 billion. Full year forecasts have been raised from $2.07 billion to $2.30 billion.
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I am concerned that strong sales of these two titles took this long to price in...possibly implying Wall Street isn't watching ATVI that closely. This could make the stock a good contrarian play.
I believe the disappointing guidance that was previously issued was bad for ATVI longs, but the fact that ATVI is changing its guidance so soon is not a good sign either. What was management thinking before?
There is probably high risk of profit taking after a 12% rally as well considering the current market environment.