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Activision (NASDAQ:ATVI) late Thursday reported results for the fiscal fourth quarter ended March 31 that were in-line with the company’s pre-announcement in early May. The video game maker reported revenue of $313 million and a pro forma loss of 4 cents a share.

Activison said its results were driven in large part by the huge success of its Guitar Hero II and Call of Duty 3 games, “as well as better than expected performance of the company’s distribution business.” The company said it expects fiscal 2008 to be “our largest and most profitable year ever.”

Todd Mitchell, an analyst with Kaufman Bros., warns that market conditions are going to get more difficult for the company from here. “Activision entered fiscal 2008 with easy comps and a strong line-up, while EA (ERTS) and THQ (THQI) entered the year with tough comps and a weak line-up,” he wrote in a note. Mitchell sees a strong fiscal first quarter, with help from new Spiderman and Shrek games, but cautions that there will be a “whole slew” of new games from other publishers in July and August, “which could take some of the wind out of Activision’s sales” (or sails).

Mitchell notes that the stock is trading at 35x calendar 2007 EPS, and 24x 2008 on a non-GAAP basis, or 48x and 32x on a GAAP basis. He asserts that “at current levels…shares of ATVI have gotten ahead of themselves.”
Other analysts are more bullish. Pacific Crest’s Evan Wilson asserts that Guitar Hero “is underappreciated,” and that “the Street has only seen the earliest indications of its ultimate success.” He sees profits jumping to 65 cents this year and 85 cents in fiscal 2009; his numbers are above the Street consensus of 55 cents and 75 cents.

UBS analyst Benjamin Schachter repeated his Buy rating on the stock Friday morning; he asserts that “there is potential for upside to guidance throughout the year.”

And one final note: if you want to see something truly breath-taking, print out the Activision earnings release: my copy chewed up 32 pages.

ATVI 1-yr chart:
atvi chart

Source: Activision: Will Guitar Hero Bring Even Brighter Days?