UPDATE 2-Activision cuts revenue view, shares dip

* Q2 EPS ex-items 8 cts/share vs Street view 7 cts

* Q2 non-GAAP rev $801 mln vs Street view $810.7 mln

* Cuts 2009 sales forecast, affirms adjusted EPS view

* Sees Q3 EPS ex-items 3 cents, rev $700 mln (Adds CEO and analyst comments, details from conference call, byline)

By Gabriel Madway

SAN FRANCISCO, Aug 5 (Reuters) - Activision Blizzard Inc (ATVI.O) offered a disappointing quarterly forecast and cut its 2009 revenue outlook with two major games delayed till 2010, but its shares were little changed as profit turned out better than expected.

The video game publisher slashed its 2009 non-GAAP revenue outlook by $300 million to $4.5 billion as it shifted hotly anticipated titles "Singularity" and "StarCraft II" into next year. But it affirmed its annual forecast for adjusted profit of 63 cents a share.

And for the September quarter, the company forecast a profit excluding items of 3 cents a share on non-GAAP revenue of $700 million. That is below analysts' average estimate for earnings per share of 10 cents on revenue of $888 million, according to Reuters Estimates.

"They maintained their [2009] bottom line guidance, which was a relief to some people," Janco Partners analyst Mike Hickey said.

But he said the company's move to lower 2009 revenue guidance was not just from the push-out of the two titles into 2010, but a recognition of persistent weakness in the industry.

Activision's shares rose close to 4 percent in after-hours trade, before settling little changed.

Activision now expects the games software market in North America and Europe to be flat to down slightly in 2009, a similar forecast to that of rival publisher Electronic Arts Inc (ERTS.O) on Tuesday. [ID:nN05478125]

Activision pledged to find new cost savings and expects stronger performance from some higher margin titles to help offset the weaker revenue.

The company has managed to weather the economic downturn better than some of its rivals, on the strength of franchises such as the blockbuster "Guitar Hero."

Analysts say that upcoming releases from the "Call of Duty" and "Tony Hawk" franchises along with "DJ Hero" gives Activision a compelling slate for the remainder of the year.

Chief Executive Bobby Kotick said on a conference call with analysts that Activision is "better-positioned than any of our competitors" despite a difficult economy, and said the company will continue to try and expand its operating margins.

The company was formed through the merger of Activision with "World of Warcraft" developer Blizzard, the former games unit of France's Vivendi SA (VIV.PA), in a deal that closed last July.

DELAYING GAMES

For the fiscal second quarter ended June 30, Activision reported a net profit of $195 million, or 15 cents a share. Excluding items, profit came in at 8 cents a share, above analysts' average forecast of 7 cents a share.

It reported a non-GAAP revenue of $801 million for the quarter, just below the $810.7 million Wall Street estimated.

The company had three of the top 10 best-selling titles in the United States in the quarter, according to research outfit NPD, with "Prototype," "Guitar Hero World Tour" and "X-Men Origins: Wolverine."

The company said its move to delay the release date for "Singularity" into the first quarter of 2010 should help the game have a stronger lift-off, since there are fewer competitive titles at that time of year.

The release of "StarCraft II" is being postponed to the first half of 2010 to coincide with the relaunch of the Battle.net online-gaming service.

But Hudson Square Research analyst Daniel Ernst said investors were unfazed by the game delays.

"They maintained bottom-line guidance. At the end of the day, earnings matter," he said. "This is a well run company that's profitable when others aren't."

The Santa Monica, California-based company also approved a $250 million increase in its stock repurchase program, taking it to $1.25 billion.

Shares of Activision Blizzard closed at $11.55 on Nasdaq and edged up 4 cents to $11.59 in extended trading. (Reporting by Gabriel Madway; Editing by Richard Chang)