THQ beats Street, sees big holiday quarter
(Reuters) - Video game maker THQ Inc reported better-than-expected quarterly results and forecast a strong holiday quarter, sending its shares up more than 12 percent in after-hours trading.
While the company appears to be turning a corner after a string of disappointing results, restructuring announcements and a falling share price, the company needs to deliver a major hit this holiday season, when it makes the most of its revenue.
"They crushed it during the quarter, but now its all about their holiday pipeline," said Mike Hickey, a National Alliance Capital Markets analyst.
Wall Street is closely watching the company's biggest releases in the current fiscal third quarter, which are a crime game called "Saints Row," a new wrestling title and a drawing tablet called the "uDraw."
In a conference call, the company's finance chief, Paul Pucino, said the company would post earnings of $1.20 per share to $1.50 per share in the third quarter. The midpoint of this range is above analysts' average expectations of $1.28 per share.
With two weeks to go before the latest version of "Saints Row" launches, Chief Executive Brian Farrell said the games pre-orders were so far four times the last one.
Farrell said in an interview that "Saints Row," which is a game involving gangs, could benefit from the buzz building around the latest version of "Grand Theft Auto," the top-crime themed game by THQ's larger rival Take-Two Interactive. Take-Two posted the first trailer for its new game on Wednesday on the Internet.
"(Grand Theft Auto) sells 15 million to 20 million copies so I'm glad they are talking about our game in the same breath," said Farrell, who admitted he had watched the "Grand Theft Auto" trailer on Friday.
THQ Inc said it plans to ship at least 3 million units of "Saints Row" in this fiscal year.
Taking into account the deferral of digital revenue from online games, THQ's net loss was $46.86 million, or 69 cents per share in its second quarter than ended Sept 30, coming in above analysts' average expectations of a loss of 83 cents per share.
The "Warhammer 40,000: Space Marine" shooter game, which came out in September, helped drive its quarterly results, the company said.
Adjusted for digital revenue, THQ's sales rose 70 percent to $119.6 million, which beat the $100.4 million analysts were on average expecting, according to Thomson Reuters I/B/E/S.
THQ, which is known for its "WWE" games, said in August it was shutting down some of its video game studios and cutting 200 jobs.
Shares of THQ rose 12 percent to $2.38 in after-hours trade following the earnings announcement, up from their $2.13 close in the regular session.
(Reporting by Liana B. Baker; Editing by Tim Dobbyn)