Activision Blizzard today posted its fiscal results for the period ending September 30. Although sales more than doubled from $326 million to $711 million, the company suffered a net loss of $108 million for the third quarter. Importantly, this was the first reported quarter following the business combination of Activision with Vivendi Games. The one-time related costs for the merger came to $78 million.

On the conference call today, Activision noted that while synergies between Activision and Vivendi were expected to be $50 - $100 million, the synergies are now on track to reach $100 - $150 million.

"For our first quarter as a combined company, Activision Blizzard's financial results were higher than the outlook we provided on our last earnings call, both on a GAAP and non-GAAP basis," noted Activision Blizzard chief Bobby Kotick. "Our performance was driven by continued strong worldwide sales of Call of Duty 4: Modern Warfare, Guitar Hero: Aerosmith and Guitar Hero: On Tour, Blizzard Entertainment's World of Warcraft and the international release of LucasArts' Star Wars: The Force Unleashed."

He continued, "In the December quarter, we will launch our strongest holiday slate ever, which is based on some of the best-selling franchises in the industry. We are excited about our holiday releases, which are all based on proven franchises, and will deliver our entire slate on schedule with strong product quality on our key titles. However, we remain cautious given the likely slowdown in consumer spending this holiday season."

"As a result of our strong momentum through the first 9 months of the year and our solid holiday slate, we are reaffirming our full year non-GAAP outlook of $4.9 billion in revenues and $1.2 billion in operating income. We also announced a $1 billion share repurchase program which illustrates our confidence in the long-term growth of the company and our commitment to providing superior returns to our shareholders."

From a sales perspective, Activision noted that Guitar Hero remained the #1 best-selling franchise in U.S. on all console platforms for the first nine months of 2008. Looking specifically at the September quarter, Guitar Hero: On Tour was the #1 best-selling title overall in North America for the Nintendo DS and Activision Blizzard was the #1 third-party publisher on the DS.

Games expected to drive the all-important holiday quarter include Wrath of the Lich King, Guitar Hero World Tour, Guitar Hero: On Tour Decades, Call of Duty: World at War, Quantum of Solace, Spider-Man: Web of Shadows, Madagascar: Escape 2 Africa, Crash Bandicoot: Mind Over Mutant, Spyro: Dawn of the Dragon, Kung Fu Panda: Legendary Warriors, TRANSFORMERS Animated: The Game and Tony Hawk's Motion.

Furthermore, the publisher said that it "continues to expect that online functionality for certain key titles to be released in the December quarter, and thereafter, will become a significant component of game play for certain platforms and that the company will have continuing performance obligations beyond the sale of the game for these titles. As a result, the company expects to begin recognizing a substantial amount of net revenues and costs of sales from these online-enabled games over the estimated service period."

Note: Although some outlets have referred to this latest quarter as Q2, it is indeed Activision Blizzard's Q3. A spokesperson explained to us, "We used to be on a fiscal calendar that started on April 1. When we closed our transaction with Vivendi in July, we switched from an April – March fiscal year to a normal calendar year. As such our year now ends on Dec. 31. Last quarter would have been Q1 under the old fiscal year. Now it's Q2 under the new calendar year with this quarter being Q3 and holiday Q4. We are just having a shortened year this year because of the merger."