Activision (ATVI): Share price defining bullish 'flag' formation

Filed under: Earnings reports, Analyst upgrades and downgrades, Microsoft (MSFT), Sony Corp ADR (SNE), Activision Inc (ATVI), Technical Analysis, Stocks to Buy

Activision (NASDAQ: ATVI) is a leading developer, publisher and distributor of interactive entertainment and leisure products. Offerings include such action titles as Tony Hawk's Underground, Doom, and Call of Duty. The firm also makes games based on licensed properties associated with the films Star Wars, Spider-Man, X-Men and Shrek. Activision games operate on Sony (NYSE: SNE), Nintendo and Microsoft (NASDAQ: MSFT) console and portable devices, as well as on personal computers. The company agreed to sell a 52% stake to Vivendi late last year, in a deal valued at $9.8 billion. Activision will be combined with Vivendi Games, to create the world's largest independent video games company.

The firm surprised the Street earlier in the month, when it reported fiscal Q4 EPS of 17 cents and revenues of $602.5 million. Analysts had been expecting five cents and $369.1 million. Management also guided FY09 EPS to $1.30 ($1.18 consensus) and FY09 revenues to $3.1 billion ($2.82B consensus). Moving toward the Vivendi link-up, the CEO promised to "focus our resources on proven properties with broad global appeal." Six brokerages subsequently declared the stock a "buy".

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