Wedbush Raises Ubisoft Estimates On GRAW2, TMNT Sales

Ahead of Ubisoft's Thursday, April 26th fiscal Q4 conference call, Wedbush Morgan's Michael Pachter has raised the firm's sales estimate from €157 million ($213.7 mil) to €167 million ($227.3 mil) on the strength of GRAW2 and TMNT. Wedbush says that its move to €167 million ($227.3 mil), spurred by sales data from NPD's March update, compare with consensus sales estimates of the quarter of €155 million ($211 mil), and the company's own quarterly quidance of "at least" €152 million ($206.9 mil). "For the March quarter," says Pachter, "we estimate that the company's U.S. sell-through was $114 million (adjusted for the extra selling week in the NPD data). This is up $26 million year-over-year, and implies that worldwide wholesale sales were up approximately $40 million (€30 million) year-over-year." "Last year," he continues, "the company released Rainbow Six and Ghost Recon in March, this year it released Ghost Recon and Teenage Mutant Ninja Turtles in March... We believe that the strength in Xbox 360, PS2 and Wii sales benefited Ubisoft this quarter, particularly in Europe. If all other things are equal, the company should report revenues that are €20 – 30 million higher than last year’s €144 million figure." Looking back to the December quarter, Pachter notes that the €311 million ($423.3 mil) in sales implies that reorder volumes in March were again strong. Last year the company did €144 million ($196 mil) in March sales following a €250 million ($340.3 mil) December quarter. Concluding that Ubisoft is a "compelling investment," Pachter says, "Overall industry sales in the U.S. during the March 2007 quarter were up around 28 – 29%, and we believe that European overall sales were up at least 20% during the period. If we adjust for the extra week, this implies combined sales growth of around 20%... Should the company deliver sales growth at the industry growth rate, it should be in a position to deliver at or above our €167 million estimate."