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Bonds News

UPDATE 2-THQ results miss Street view, to cut 600 jobs

* Q3 loss ex-items 14 cents vs Wall St view 7 cents profit

* Q3 rev falls 30 pct to $357 mln vs Street view $402 mln

* To cut 24 pct of workforce, or 600 jobs

* Says Q4 will be worse than it previously expected (Adds comments on current quarter, byline)

By Gabriel Madway

SAN FRANCISCO, Feb 3 (Reuters) - THQ Inc THQI.O posted a quarterly loss as sales of video games fell more than expected, and the company warned results for the current quarter were likely to be "significantly" below what it had previously anticipated.

The publisher of franchises such as “Saints Row” and “WWE Smackdown vs Raw” also said on Wednesday that it plans to layoff 600 people in fiscal 2010 and cut spending by $220 million.

“Unquestionably this is a challenging time for THQ,” Chief Executive Brian Farrell said. “The video game sector as a whole grew in 2008, and clearly, we did not participate fully in that growth.”

Chief Financial Officer Paul Pucino said on a conference call that THQ expects results for the March quarter, its fiscal fourth quarter, to be “significantly below” its previous expectations.

The company declined to give a specific forecast for the quarter. It had previously targeted fiscal 2009 revenue of $875 million to $900 million.

Pucino was named CFO on Wednesday to replace Colin Slade, who is on indefinite medical leave.

THQ plans to issue fewer titles, while expanding its presence in the games category of fighting.

Farrell said the focus is on profitability in 2010, but declined to say if he expected to gain market share. Demand was holding, he said.

“Consumers still are buying video games. I want to be very clear about that. How they react longer term, again, I don’t think we’re prepared to make that prognostication,” he said.

THQ swung to a net loss in its fiscal third-quarter ended Dec 31 of $191.8 million, or $2.86 a share, from a year-ago profit of $15.5 million, or 23 cents a share.

Excluding a $118.1 million goodwill impairment charge and other items, THQ’s loss was 14 cents a share. Analysts were expecting a profit of 7 cents per share, according to Reuters Estimates.

Revenue fell 30 percent to $357.3 million, missing the average Wall Street estimate of $401.8 million.

The company’s cash, cash equivalents and short-term investments fell to $144.3 million from $317.5 million at the end of its last fiscal year in March 2008.

THQ's much larger rival Electronic Arts Inc ERTS.O posted weaker-than-expected results on Tuesday and forecast a loss for the current fiscal year.

Shares of the Agoura Hills, California-based THQ have fallen nearly 80 percent from a year ago. Its stock closed the regular session at $4.14, down 10 cents, on the Nasdaq. (Reporting by Gabriel Madway; Editing by Bernard Orr, Leslie Gevirtz)

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