French publisher Ubisoft is putting together another fantastic year. For the first half of the fiscal year ended September 30, the company posted net sales of 261 million euros ($386 million), an increase of 51.8 percent. Net income rose 11.7 percent to 30.6 million euros ($45 million) while operating income totaled 12.5 million euros compared with a 35.3 million euro loss recorded during the first-half of 2006-07.

Importantly, gross margin improved as well. It represented 64.1 percent of sales, up from 59.4 percent in the comparable prior-year period. "This strong increase was mainly driven by new generation games, which have a higher sale price and accounted for 75 percent of overall sales during the period versus 39 percent one year earlier," the company said.

"Ubisoft's excellent sales performance during the first half of fiscal 2007-08 has considerably boosted our earnings figures for the period," said CEO Yves Guillemot. "In addition, the early indications for our Christmas games launches have been positive, especially for Assassin's Creed, whose sell-through sales have already topped the record level of 1 million units. These very strong trends further underpin our confidence that we will achieve our objectives for the current year and add further impetus for fiscal 2008-09, which we expect to be a another year of robust growth for the Group."

Ubisoft said part of its improvement came from a 65.4 million euro rise in gross profit and "a considerable reduction in R&D expenses as a percentage of sales, particularly due to the solid level of back catalog sales."

In addition to the aforementioned success of Assassin's Creed, which the company said is "a positive sign that the brand will be successful and that Ubisoft has created another long-term franchise," Ubisoft's sales were also driven by Rayman Raving Rabbids 2, Naruto: Rise of a Ninja, Beowulf and a number of casual games such as titles from the Imagine, Petz and MyCoach brands, which have "recorded a solid early performance."

In addition to the impressive fiscal results, Ubisoft announced that the PS3 exclusive Haze has been pushed back to the fourth fiscal quarter (Jan. – Mar. 08). The game had been previously scheduled to release during the third fiscal quarter. In addition, Tom Clancy's Splinter Cell Conviction has now been moved out of its scheduled fourth fiscal quarter release so that it can "form part of a stronger lineup for fiscal 2008-09."

Ubisoft reiterated its guidance for the third quarter and full fiscal year. For Q3, sales of 330 million euros are expected and for the full year, Ubisoft is forecasting sales of around 825 million euros ($1.2 billion). The company also expects current operating income before stock options to represent at least nine percent of sales.