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Activision beats Street, sees bright future

The video game publisher zips past analyst estimates and raises its sales and earnings targets for fiscal 2002.

Activision topped analysts' estimates in its fourth quarter Wednesday, raking in $875,000, or 3 cents a share, on sales of $127 million.

First Call consensus pegged the video game publisher for a profit of 1 cent a share on sales of $100 million.

Activision shares closed up $1.69 to $28.95 ahead of the earnings report before surging to $30.90 in after-hours trading.

The $127 million in sales represents a 22 percent improvement from the year-ago quarter, when it posted a loss of $53 million, or $2.07 a share, on sales of $104 million.

"Overall, fiscal 2001 was a good year for us," Chief Executive Robert Kotick said during a conference call with analysts. "Over the next five years, we're likely to see video game sales double."

In the fiscal year, Activision earned $21 million, or 75 cents a share, on sales of $620 million, up 8 percent from fiscal 2000, when it posted a loss of $34 million, or $1.38 a share, on sales of $572 million.

It exited the quarter with $126 million in cash and short-term investments, up from $50 million at the end of fiscal 2000.

Activision also raised estimates for the first quarter and all of fiscal 2002.

It now expects to post a loss of 5 cents a share on sales of $100 million compared with the current First Call estimate calling for a loss of 18 cents a share on sales of $85 million.

For fiscal 2002, Activision predicts it will earn between 76 cents and 80 cents a share, up from the current consensus estimate of 77 cents a share.

Last quarter, Activision shattered analysts' estimates when it earned $22.3 million, or 70 cents a share, topping the Street estimate by 10 cents a share.

The stock moved up to a 52-week high of $29.69 earlier this month after falling to a low of $5.38 in June.

Eleven of the 12 analysts tracking the stock rate it either a "buy" or a "strong buy."