Activision Posts Decline in Profit, Forecasts Current-Quarter Loss

Activision Inc., maker of the “Tony Hawk” series of video games, said Thursday that fiscal fourth-quarter profit dropped 46% as operating expenses increased. The company forecast an unexpected loss for the current period.

Net income fell to $3.6 million, or 2 cents a share, from $6.7 million, or 3 cents, a year earlier. Sales rose 25% to $203.9 million, the Santa Monica-based company said.

Activision, which followed larger rival Electronic Arts Inc. in predicting a loss in the current quarter, also lowered its revenue forecast to $200 million from $215 million.

Activision President Ronald Doornink, speaking on a conference call with analysts, cited delays in Sony Corp.’s release of its PlayStation Portable machine in Europe and of two films on which new games are based.

Shares of Activision fell 29 cents to $14.74 in late trading after rising 15 cents to $15.03 on Nasdaq. The stock has climbed 30% in the last year.

The loss this quarter will be 3 cents a share, Activision said, compared with an average profit of 2 cents forecast by analysts surveyed by Thomson First Call. Analysts had on average expected revenue of $220.7 million.

The company reiterated that revenue for the fiscal year ending March 2006 would be $1.43 billion and that it would earn 68 cents a share, compared with the 66-cent average estimate in a Thomson survey.

On Tuesday, Electronic Arts, the largest U.S. video game maker, also surprised investors by predicting a loss this quarter and said sales would trail analysts’ estimates.