THQ losses hit $431 million, Saints Row 2 sells 2.6 million

[UPDATE] Struggling publisher's annual earnings slip to $830 million; Volition's free-range crime actioner a solid hit; Warhammer 40K franchise sells 4.5M, Saints Row series at 5M.

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THQ's 2009 fiscal year was, to put it politely, turbulent. Facing mounting losses on sinking revenues even before the global economy took a dive at the end of 2008, the publisher has enacted sweeping company-wide changes that include $220 million in cost-cutting measures at the cost of nearly a quarter of its global workforce.

Saints Row 2 slays 2.6 million.
Saints Row 2 slays 2.6 million.

Today, THQ's financial status snapped into focus, as the publisher reported that revenues for its fiscal year ended March 31, 2009, had slipped 22 percent to $830 million. Losses for the period expanded dramatically, with THQ posting a net loss of $431.1 million during its 2009 fiscal year, compared to $35.3 million in the red a year ago.

Breaking out its performance during the January-March quarter, THQ said revenues slipped 9 percent to $170.3 million, with losses totaling $96.9 million. Top sellers for the publisher during the period were WWE Legends of Wrestlemania and Warhammer 40,000: Dawn of War II. The publisher also said that Saints Row 2--developed by layoff-target Volition Inc.--has now sold 2.6 million units worldwide.

"In light of a challenging fiscal 2009, we have substantially completed a significant realignment of our business to position THQ for profitability and positive cash flow in fiscal 2010," said THQ president and CEO Brian Farrell said in a statement. "We have taken decisive actions to achieve our cost saving objectives, eliminating $220 million in cash expenditures while at the same time implementing a focused product strategy. We are investing in the brands and products with the highest potential to drive THQ’s long-term profitable growth."

THQ also announced today that it has secured a $35 million line of credit at Bank of America--itself an institution that needs to raise $33.9 billion in capital to satisfy government regulators, The New York Times reports. As noted by THQ CFO Paul Pucino, "In today's economic environment, we are pursuing this credit facility as a prudent backup to our $141 million cash and short-term investment balance at March 31, 2009."

Looking ahead to fiscal 2010, which runs April 1, 2009, through March 31, 2010, THQ expects to increase upon that cash balance by $50 million by year's end. Top releases for the publisher include Darksiders, Red Faction Guerrilla, UFC 2009 Undisputed, and WWE SmackDown vs. Raw 2010. In addition to the previously revealed mass-market titles MX vs. ATV and All Star Cheer Squad 2, THQ expects to announce three more titles of the casual-oriented ilk for release during the current fiscal year.

THQ is holding its quarterly conference call with investors this afternoon. This story will be updated with details as appropriate.

[UPDATE] Highlights from the conference call are listed below:

--THQ CEO Brian Farrell said that the Warhammer 40,000 franchise has now shipped more than 4.5 million units, while the Saints Row franchise has sold nearly 5 million units. WWE SmackDown vs. RAW 2009 also shipped more than 4.5 million units during the 2009 fiscal year.

--CFO Paul Pucino detailed a number of reasons THQ sales dipped during the fiscal year. Namely, the financial officer noted that WWE franchise sales slipped 24 percent, kid-friendly game sales fell 38 percent, and currency exchange rates were unfavorable.

--According to Farrell, THQ is not expecting Sony to cut the price of the PlayStation 3 at E3, though he does expect a price cut to occur later this year.

--Citing figures from Microsoft, Farrell said that UFC 2009 demo downloads are in the top 1 percent of all demos released through Xbox Live. Red Faction is in the top 7 percent, said Farrell.

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