Activision shares soar after 4Q results fly past estimates

The Santa Monica, Calif.-based company's stock jumped $2.01, or 7.3 percent, to $29.71 Friday, after earlier hitting an all-time high of $30.15. The stock movement could make Activision's pending acquisition by French media conglomerate Vivendi SA more valuable.

Activision said Thursday the deal is on track to close in the next few weeks. The new publicly held company, to be called Activision Blizzard, will rival Electronic Arts Inc. as the world's largest video game publisher. Vivendi will own a 52 percent stake.

As part of the deal, shares of Vivendi Games will be converted into 295.3 million new shares of Activision at $27.50 per share, for a value of $8.1 billion. The deal also calls for Vivendi to purchase 62.9 million newly issued Activision shares the same price.

But, with Activision's stock trading above the set price, the value of the deal will most likely increase.

Wedbush Morgan analyst Michael Pachter said the combined company could reward shareholders for the increased value by buying back shares. With fewer shares outstanding, each would reap more of the gains from the company's performance.

For the three months ended March 31, the fiscal fourth quarter, Activision earned $44.2 million, or 14 cents per share, compared with a loss of $14.4 million, or 5 cents per share, in the same period a year earlier.

It was the company's most profitable quarter outside the holiday season, fueled by stellar sales of "Guitar Hero III" and "Call of Duty 4."

Excluding stock options costs, Activision earned $54.9 million, or 17 cents per share, far more than the 5 cents per share that analysts polled by Thomson Financial expected.

Revenue jumped 93 percent to $602.5 million from $312.5 million, beating analysts' average projection of $369.1 million -and topping Activision's own guidance of $350 million.