* Competition weighs on bottom line
* Tough road still ahead -analyst
By Malathi Nayak
SAN FRANCISCO, May 15 Video games publisher THQ
Inc slipped to a loss in its fiscal fourth quarter, as
it struggled with intensifying competition, a weak market and
THQ, which is fighting to avert a stock delisting, has been
losing ground to larger rivals like Activision Blizzard Inc
. After a spell of weak sales, Nasdaq told the company
in January it had until July 23 for its shares to close above $1
for at least 10 straight sessions, or be delisted.
Investors have since been closely watching the stock, whose
shares held steady at about 67 cents in after-hours trade, from
a close of 68 cents on the Nasdaq.
THQ, known for its wrestling and Ultimate fighting games,
said in April it expected to lose less money in the fourth
quarter than previously forecast after strong sales of Saints
Row: The Third and UFC Undisputed 3.
"The bigger picture for them still looks weak as it's a
scale business, and you need to have substantial revenue,"
Sterne Agee analyst Arvind Bhatia said.
The Los Angeles-based company is trimming staff and
whittling down non-core businesses. It shut down its uDraw game
tablet and exited its traditional kids' licensed games business,
and also announced 240 layoffs across its various development
THQ CEO Brian Farrell told Reuters the company had completed
"all the heavy lifting" in its restructuring plan and did not
expect more layoffs.
"It frees us up to focus on the strategy, which is these
connected core experiences with a lot of digital content,"
The company has Darksiders II and an extension to Saints
Row: The Third in its 2012 product pipeline.
Bhatia said that despite THQ's efforts to cut costs and weak
products, the small player faces a rough road ahead in a
Even big publishers like Electronic Arts Inc and
Activision have struggled to turn gamers from one-time
purchasers into subscribers who generate steady revenue.
On Tuesday, THQ said its total revenue rose to $184.2
million from $124.2 million a year ago.
It posted a net loss of $53.2 million, or 78 cents per
share, compared with a loss of $44.1 million, or 65 cents per
share a year ago.
Adjusted for the deferral of digital revenue and other
items, the company lost $8 million, or 12 cents per share,
beating Wall Street expectations of a loss of 14 cents per share
according to Thomson Reuters I/B/E/S. Adjusted revenue fell 31
percent to $170.7 million.