THQ shares jump after fiscal 3rd-quarter results meet estimates, solid 4th-quarter guidance

THQ shares climb after quarterly results, outlook

NEW YORK — Shares of THQ Inc. jumped Thursday after the video game publisher predicted it would break even in its fiscal fourth quarter, better than the loss analysts expect.

Wedbush Morgan analyst Michael Pachter said the company’s third-quarter results announced late Wednesday came in roughly in line with expectations, helped by solid game sales and cost management.

“THQ has made tremendous progress in implementing its major initiatives, slashing operating expenses, improving game quality, and selecting titles that have the potential to perform well in the marketplace,” wrote Pachter, who rates THQ “Neutral” with a target price of $6. “We think that costs are under control, and that THQ can deliver dramatic earnings growth with modest revenue growth.”

Signal Hill analyst Todd Greenwald also kept a “Hold” rating on the stock, saying while it is trading at an “enticing” value, “it is coming off 2 very challenging years in which it lost market share and experienced sharp declines in earnings.”

“After examining this year’s release slate, we remain skeptical that THQ will deliver on all of its major releases,” the analyst wrote.

THQ also said it has refocused two of its game development studios to concentrate on games for digital distribution, a small but fast-growing segment of an industry that still makes the bulk of its money selling discs. The move follows larger rival Electronic Arts Inc.’s acquisition of Playfish Inc., a creator of popular social networking games, late last year.

THQ said Wednesday it is cutting about 60 jobs as a result of its studio realignment.

Shares of Agoura Hills, Calif.-based THQ rose 29 cents, or 5.7 percent, to $5.39 in afternoon trading Thursday. The stock has traded in the 52-week range of $2.23 to $9.03.