THQ announces holiday results, delays S.T.A.L.K.E.R.

Publisher meets projections, sheds light on confusing announcement from Ukrainian FPS developer.


While game industry publishers and analysts alike predicted a falling sky when it came to 2005's holiday sales figures, THQ made a note of standing by its previously stated projections. Today the company announced its financial results for the quarter ending December 31, 2005, and it turns out the publisher actually surpassed its expectations.

The company had projected $320 million in revenue for the 2005 holidays, and actually pulled in a little less than $358 million. However, that's still short of the $400 million in sales the company posted for the same quarter the year before.

Profits were likewise down from the prior year. THQ's net profit for the quarter totaled $47.6 million, $.72 cents per diluted share. For the 2004 holiday quarter, the company reported profits of $62.9 million, or $1.05 per diluted share.

THQ credited the numbers to its strategy of targeting mass-market consumers. During the quarter, it shipped more than a million copies each of Bratz Rock Angelz, The Incredibles: Rise of the Underminer, and SpongeBob SquarePants: Lights, Camera, Pants. The company also said it shipped more than 2.5 million copies of WWE SmackDown! vs. RAW 2006 during the quarter.

In the conference call accompanying the publisher's quarterly report, THQ also settled a matter of great confusion. Earlier this week, the Ukrainian developer of the sci-fi PC first-person shooter S.T.A.L.K.E.R.: Shadow of Chernobyl sent out an e-mail saying that the game "is on the stage of beta approval."

While THQ didn't address the developer's announcement directly, it did say that the game is now scheduled for the fourth quarter of its fiscal year 2007 (January through March of 2007). Gas Powered Games' spiritual successor to Total Annihilation, Supreme Commander, was also confirmed for the same quarter.

Speaking of THQ's upcoming fiscal year, the publisher also gave its first performance projections for the year. It expects sales to increase 14-20 percent, despite an expected transitional slump for the industry as the next-generation consoles carve out their chunk of the market.

Investor reaction to the report was mildly positive, as THQ stock was trading up $.30 to $26.50 at press time, with more than twice the normal volume of shares trading hands.

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