THQ posts 3Q profit as lower costs offset a small drop in revenue, issues strong 4Q guidance
By APWednesday, February 3, 2010
THQ Inc. posts 3Q profit on lower costs
AGOURA HILLS, Calif. — Video game developer THQ Inc. on Wednesday reported a profit for the third quarter, as lower costs more than offset a small decline in revenue.
It also issued sales and profit guidance for its fourth quarter above Wall Street expectations, sending its stock surging in after-market dealings.
The company, maker of “WWE Smackdown vs. Raw 2010″ and other video games, earned $542,000, or a penny per share, in its fiscal third quarter that ended Dec. 31.
That’s compared with a loss of $191.8 million, or $2.86, in the same quarter a year earlier. The 2008 quarter included a $118.1 million charge to write down the value of assets.
Excluding one-time items, THQ earned $26.6 million, or 35 cents per share, in the quarter compared with a loss of $9.6 million, or 14 cents.
THQ’s adjusted profit fell below the 42 cents expected by analysts on average, according to Thomson Reuters. Analysts’ forecasts typically exclude one-time items.
Revenue came to $356.7 million, down from $357.3 million. Analysts were expecting $356.8 million.
Looking ahead, THQ said it expects fourth-quarter sales to come in at $175 million to $185 million, higher than the $166.3 million analysts were expecting. These are sales of video games that include revenue that must be deferred under current accounting rules.
THQ said fourth-quarter earnings will be breakeven compared with the prior year. Analysts were forecasting a loss of 3 cents per share.
Shares of THQ, based in Agoura Hills, jumped 43 cents, or 8.4 percent, to $5.53 in extended trading after the earnings report. The stock ended the regular session down 6 cents to $5.10 on Wednesday.
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