Activision has announced financial results for the second fiscal quarter ended September 30, 2007, revealing record revenues of $317.7 million, a 69 percent increase compared to net revenues of $188.2 million reported for the same period last year. Net income for the second quarter was only $0.7 million, essentially break-even earnings per share. Last year, however, during the same period the company posted a net loss of $24.3 million, so it's certainly a huge improvement.

For the first half of the fiscal year, revenues more than doubled to $813.2 million (compared to net revenues of $376.2 million last year) and net income totaled $28.5 million – far better than last year's net loss of $42.6 million.

Second quarter results were largely driven by the worldwide release of Guitar Hero Encore: Rocks the 80s on the PS2. European releases of Transformers and Enemy Territory: Quake Wars also contributed. In fact, Transformers was the #2 third-party title on all platforms in Europe, according to Charttrack and Gfk, and in the U.S., it ranked as a top-10 best-selling console and handheld title, according to The NPD Group. On a worldwide basis, the game was the #1 third-party handheld title for the quarter, including the #1 best-selling game for the Nintendo DS and the PSP, according to the NPD, Charttrack and Gfk.

Overall, Activision's Q2 was hugely successful. The publisher doubled its console and handheld market share in the U.S. from five to 10 percent year-over-year, and the company's international publishing net revenues grew 80 percent over the prior year, with the first six months of the fiscal year up 145 percent.

"Our second quarter net revenues were the highest in our company's history and we ended the quarter with $962 million in cash and short-term investments. We significantly strengthened our development capabilities through our acquisition of Bizarre Creations, a proven top-tier developer of racing games which will facilitate our entry into this important segment," said Robert Kotick, Chairman and CEO of Activision.

As good as the second quarter was, Activision is expecting the third quarter to really propel them. Revenues are expected to exceed $1 billion thanks in large part to Guitar Hero III: Legends of Rock, which is off to an incredible start, and Call of Duty 4.

"During Q3, we shipped more units of our internally developed, wholly owned franchise, Guitar Hero III: Legends of Rock, than any other game in Activision's history. Within the first seven days, consumer sell through was more than $100 million in North America alone -- our largest product launch ever," Kotick continued. "Our third-quarter slate is expected to deliver our strongest quarterly results to date, with forecasted net revenues in excess of $1 billion. The eagerly anticipated Call of Duty 4: Modern Warfare will launch tomorrow, and all of our holiday titles in North America will be in retail distribution by mid-week.

"We are continuing to leverage our strong portfolio of franchises across key geographies and gaming platforms. As a result of our strong performance in the first six months of the fiscal year, and our solid third quarter release slate, we are raising our fiscal year 2008 net revenues and earnings outlook."

For the full fiscal year, Activision now expects net revenues of $2.07 billion and earnings per share of $0.55. The back half of the fiscal year, however, will be affected by the acquisition of Bizarre Creations, which will be dilutive by approximately $0.02 - $0.03 per share; Activision already incorporated this into its fiscal year outlook.