Prophecy is a noun only, is pronounced "PROF-i-see," and means "a prediction," "foretelling," or "revelation of what is to come": "The official's prophecy was that the energy crisis would become even more acute." Prophesy is a verb only, is pronounced "PROF-i-sigh," and means "to predict," "to foretell," "to indicate what is to come": "The marriage counselor prophesied that the couple would be reunited." Prophesy is overused for such words as predict and forecast. Related words are prognosticate, divine, project, foresee, prediction, and revelation.
Dictionary of problem words and expressions. Harry Shaw. 1975.