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| Activision Provides Earnings Update for 2006 Activision, Inc. announced that it expects net revenues and earnings for the third and fourth quarter and full fiscal year 2006 to be lower than the outlook previously provided by the company on November 2, 2005. Although there are still a number of critical selling days left in the quarter, which ends December 31, 2005, the company anticipates that earnings will be significantly lower than the outlook previously provided. The company has noted the following factors in its assessment of market conditions and the reasons for the changes in performance expectations: While a number of the company's products are outperforming the competition in the marketplace, overall the company's portfolio of products are not selling as well as had been anticipated. The company expects lower than anticipated reorders of its most profitable titles. During the quarter, the company significantly increased spending on consumer and trade activity driven in part by competitive pricing actions. As a result, the company expects that its operating results will be disproportionately affected by title and market underperformance. Videogame hardware and software market conditions in the U.S. and Europe are weaker than expected. For the October/November period, U.S. software sales were down 20%, as measured by NPD FunWorld, and sales in the month of December are tracking below company expectations. The company has also seen similar trends in the European software market. The weakness in the U.S. and European markets is believed to be driven by an accelerated shift in consumer demand away from current generation hardware and software due to the introduction of new hardware as well as declines in consumer spending. The company's fourth quarter will also be negatively impacted by the factors listed above and lower than expected catalogue sales. The company currently expects to report its final results for the third quarter in late January. write your comments about the article :: © 2005 Game News :: home page |