THQ trims Q1 loss
Despite a dip in revenue, the SmackDown! and Saints Row publisher cuts April-June shortfall to $9.3 million, reaffirms $1.15 billion full-year guidance, reconfirms new Red Faction.
When is a loss not a loss? Technically, never. However, when a company beats its own expectations by losing less money, it is considered a win of sorts, as THQ found out today. This morning, the Agoura Hills, California-based publisher posted a $9.3 million net loss ($0.14 cents a share) for the quarter months ending June 30. That's down from the $12.1 million ($0.19 per share) it lost during the same three months in 2006, and nearly half the $0.26 per share loss the company itself predicted.
THQ's net sales for the quarter were $104.5 million, down considerably from $138.8 million the previous year. The publisher's licensing deal with Disney/Pixar continued to pay off, with the multiplatform tie-in to the blockbuster film Ratatouille shipping over 1 million units since its June 26 release. Another Pixar-inspired game, last year's Cars, also sold well during the quarter, as the wrestler SmackDown! vs. RAW 2007
THQ's brief earnings overview emphasized the company was sticking with its guidance for the 2008 fiscal year. When the current quarter ends, the company believes it will have taken in net sales of around $240 million and net income of approximately $0.10 per share.
For the full fiscal year, which ends on March 31, 2008, the publisher expects net sales of between $1.12 billion to $1.15 billion and net income between $1.34 to $1.44 per share. In a postreport conference call, THQ president and CEO Brian J. Farrell told analysts that he expects five internally developed multiplatform titles to sell over 1 million units during FY08: Frontlines: Fuel of War, Stuntman Ignition, MX vs. ATV Untamed, Juiced 2: Hot Import Nights, and the latest Destroy All Humans! game.
Farrell also dated the highly anticipated Stuntman Ignition would ship on August 28 and the console actioner Conan would arrive earlier than expected in October. MX vs. ATV Untamed also moved ahead, shifting from a January to December release. In addition, he reconfirmed that THQ is resurrecting its popular Red Faction series, a fact first revealed back in February.
Unfortunately, THQ's optimism was not infectious on Wall Street. The publisher's stock was clobbered on Wall Street in early-morning trading, losing as much as $1.56 per share, or over 5 percent of its value. As of press time, it was trading at around $27.25 per share.
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