THQ slashes losses, Warhammer 40K: Space Marine due by April 2011

UFC 2009 publisher sees revenues dip during July-Sept. quarter, but cuts losses from $115.3 million to $5.6 million; shares jump more than 14%; Homefront also slated for next fiscal year.


THQ's expansion into the mixed martial arts arena did wonders for the publisher's first-quarter bottom line upon its release in May. Today, THQ reported its results for the second quarter (three months ended September 30), and while UFC continues to perform, the fighter has begun to show signs of slowdown.

UFC has no intention of tapping out.
UFC has no intention of tapping out.

During the July-September window, THQ said revenues fell to $101.3 million, down from $164.8 million generated during the same time last year. The publisher also posted a $5.6 million loss during the quarter, a figure that stands as a significant improvement over the prior-year's $115.3 million shortfall.

According to THQ president and CEO Brian Farrell, the earnings reflect the company's shift toward a smaller, more focused product pipeline. Following a $220 million cost-cutting strategy enacted earlier this year, THQ said that it would realign its product portfolio to emphasize quality over quantity, as well as to halve its yearly core game slate.

THQ did not provide updated sales figures for UFC 2009 or its other recent standout release, Volition's Red Faction: Guerrilla. However, the publisher did note that UFC 2009 remains a top-five best-selling Xbox 360 and PlayStation 3 game during the first nine months of the year.

The earnings report has struck a favorable chord with investors. THQ's stock has jumped by 14.5 percent in after-hours trading on the NASDAQ stock exchange to $5.74 as of press time.

[UPDATE] Following THQ's earnings announcement, the publisher held a post-earnings conference call with analysts and investors to discuss the results. As part of that call, THQ's Brian Farrell said that the publisher has lowered its industry outlook from flat year-over-year sales to a low- to mid-single digit loss.

Farrell also provided a glimpse at the publisher's 2011 fiscal year, which runs from April 1, 2010, to March 31, 2011. According to the executive, THQ will release new installments in its UFC and WWE franchises during the period (despite a licensing dispute with WWE partner Jakks Pacific that is still unresolved). The publisher also plans to release Warhammer 40K: Space Marine, the series' first outing on the Xbox 360 and PlayStation 3, as well as Kaos Studios' Homefront during its 2011 fiscal year.

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