THQ posts $900 million in full-year sales
Publisher makes "significant turnaround" with launches of UFC, Red Faction, Darksiders; company losses narrowed to $9.6 million.
After 13 straight years of growing revenues, THQ last year reported a steep 22 percent full-year sales decline. The drop came in the wake of a global economic downturn, while the publisher was enacting company-wide changes that included $220 million in cost-cutting measures at the cost of nearly a quarter of its global workforce.
While neither the economy nor THQ are back to where they were before the downturn, the situation for the game maker has since stabilized, as evidenced by modestly positive full-year and fourth-fiscal-quarter results released today. For the 12 months ended March 31, 2010, THQ reported net sales of $899.1 million, up 8 percent from the previous year's $830 million in revenues. The publisher also reported an operating loss of $9.6 million, a substantial improvement from the previous year's $387.7 million shortfall.
THQ's fourth quarter played out much like its fiscal year, as sales were up and losses narrowed. For the January-March period, the publisher's net sales totaled $197.7 million, up 16 percent year-over-year. Meanwhile, operating losses shrank to $9.4 million, down from $87.1 million for the same period the year before.
In an investor conference call after the announcement, THQ president and CEO Brian Farrell said the company had made a "significant turnaround" during the year. He pointed to the launches of UFC, Darksiders, and Red Faction as specific success stories, noting that UFC shipped 4 million units over the year. Farrell said that matched the 4 million shipped for WWE SmackDown vs. Raw 2010.
Speaking of the pro wrestling franchise, THQ said it plans to release its WWE Online game in Korea this year and will announce a new WWE branded game at next month's Electronic Entertainment Expo. The long-in-development massively multiplayer online role-playing game based on Warhammer 40,000 is also scheduled to debut at E3, according to the publisher.
THQ also touted its kids, family, and casual gaming efforts, with Farrell noting that Drawn to Life: The Next Chapter and Marvel Super Hero Squad each shipped 1 million copies. New installments in the Marvel Super Hero Squad series are planned to launch in the current fiscal year, which ends March 31, 2011.
Overall, THQ upped its market share in the United States to 4.9 percent, making it the fourth-largest third-party publisher. For the previous fiscal year, THQ accounted for 3.6 percent of the US market.
Looking forward, THQ expects to continue improving its bottom line in the current year (fiscal 2011), with growth accelerating in fiscal 2012 on the strength of its core game lineup. This fiscal year, THQ expects to launch its original intellectual property Homefront and a new Red Faction game. For the year after, THQ is working on Warhammer 40,000 Space Marine, a Darksiders sequel, and a new Saints Row game.
For the 12 months ending March 31, 2011, THQ is expecting sales to be up 2 to 4 percent, between $905 million and $920 million. It also expects to report earnings per share between $0.20 and $0.30. For comparison, the $9.6 million full-year operating loss represented a loss per share of $0.13.
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