Robert Kotick, Chairman and CEO, commented, "Fiscal 2007 net revenues are expected to be the highest in Activision's history. Our results were driven by our proven properties Call of Duty 3, Marvel: Ultimate Alliance and Tony Hawk's Project 8; our successful integration of the RedOctane business and expansion of the Guitar Hero franchise globally; our early leadership position on the next-gen consoles; and the strength of our distribution business. We ended fiscal 2007 as the #2 U.S. third-party publisher, grew our market share in the U.S. and had two of the top 10 best selling U.S. titles, according to The NPD Group."
For the fiscal fourth quarter, the company expects to report record net revenues of $313 million, as compared to $188 million for the fourth quarter of last fiscal year and the company's prior outlook of $200 million. The company's fiscal fourth quarter revenues were fueled by Guitar Hero II and Call of Duty 3, as well as better-than-expected performance of the company's distribution business due to the European launch of the PS3.
As of today, Activision is not in a position to provide preliminary GAAP earnings per share as it has not yet determined the company's fiscal 2007 tax rate, which will be impacted by expenses related to the review of its stock option grant practices. As previously announced, the company believes that its fiscal fourth quarter results will be significantly impacted by higher legal expenses and professional fees relating primarily to its internal review of historical stock option practices, including the special sub-committee review, Nasdaq proceedings, informal SEC inquiry and derivative litigation.
Separately, Activision announced that it expects to record additional non-cash charges for stock-based compensation expenses in prior periods totaling approximately $67 million before taxes from stock options granted over a 13 fiscal year period from 1994 - 2006. The company hopes to complete its review of historical stock option grants and be in a position to file its restated financial statements and become current with its period filings with the SEC by the end of May 2007. The company has been granted additional time, beyond the May 9 deadline previously reported, to regain compliance with Nasdaq listing requirements.
Additionally, Activision reaffirmed its fiscal year 2008 net revenue outlook, which is expected to exceed $1.6 billion. The company expects to provide more detailed guidance on fiscal year 2008, as well as additional financial results of operations for its fiscal fourth quarter and fiscal year ended March 31, 2007 on a conference call which the company plans to host shortly after filing its restated financial statements and becoming current with its period filings with the SEC.