UPDATE 3-THQ results top Wall St's estimate, shares rise

* Q2 loss ex-items 37 cts vs Street loss est 48 cts

* Q2 adjusted revenue $100.4 mln

* Sees second-half net sales similar to a year ago

* Shares up 10.6 pct after hours (Adds CEO comment, fresh share price)

By Gabriel Madway

SAN FRANCISCO, Nov 4 (Reuters) - Video game publisher THQ Inc (THQI.O) reported better-than-expected quarterly results on cost cuts and the strength of catalog title sales, and its shares rose 10.6 percent in extended trading on Wednesday .

Analyst expectations were low for the publisher of the "Saints Row" and "Red Faction" franchises heading into the company's fiscal second-quarter results, because no major game releases were on the calendar.

With the critical holiday selling season at hand, the video game industry as a whole is facing head winds. Despite recent price cuts on gaming consoles, recession-weary consumers have so far proved reluctant to shell out their entertainment dollars for software.

THQ lowered its full-year outlook for the game software industry. It now expects 2009 sales to be down low- to mid-single digits, versus its previous flat forecast.

"We expect a cautious consumer and retail environment this holiday, with limited visibility, as we expect many consumers to wait until late in the season to make their gift purchases," Chief Executive Brian Farrell said on a conference call with analysts.

"We expect retailers to place conservative opening orders and to replenish products that are selling through."

He said THQ, which has undergone a recent restructuring as it reduces expenses, continues to focus on developing a smaller number of hit games.

The company forecast fiscal 2010 second-half net sales similar to the second half of last year, with third quarter sales off roughly 5 to 10 percent year-over-year, and stronger fourth quarter sales than a year ago.

THQ also said it still expects fiscal 2010 net sales to grow, and to achieve profitability on a non-GAAP basis for the year.

MKM Partners analysts Eric Handler noted that the company's guidance for the year was essentially unchanged, and he called the after-hours share rise a bit of a relief rally for a stock that's been struggling of late.

THQ shares are up around 19 percent this year but down roughly 25 percent since the start of October.

"Given all the turmoil going on in the industry, the fact that you beat a number, it's a positive. But in terms of what's really changed on the margin, not much."

THQ said sales in the quarter were led by the titles "UFC 2009 Undisputed" and "Up."

The publisher reported a net loss attributable to THQ of $5.6 million, or 8 cents a share, in its quarter ended Sept 30, versus a year-ago net loss of $115.3 million, or $1.73 a share.

Excluding items, the loss was 37 cents a share, ahead of the average analyst estimate for a loss of 48 cents a share, according to Thomson Reuters I/B/E/S.

Revenue fell 39 percent to $101.3 million, while adjusted revenue came in at $100.4 million.

Wall Street was expecting revenue of $92.1 million.

Shares of Agoura Hills, California-based THQ closed at $5.02 on the Nasdaq and rose to $5.55 in extended trading. (Reporting by Gabriel Madway; editing by Leslie Gevirtz and Steve Orlofsky)