Sales fell at THQ ( THQI) in the company's first quarter, but results topped the Street's expectations. However, the video-game software publisher repeated a recent pattern Thursday, offering a disappointing outlook for the current period. Investors seemed to focus largely on the positive. In recent after-hours trading, shares of THQ were up 48 cents, or 2.2%, to $22.60. In the period ending June 30, the company lost $12.1 million, or 19 cents a share. The red ink rose from the year-ago quarter, when THQ lost $4 million, or 6 cents a share. Sales fell 12% year over year to $138.8 million. THQ, like other companies in the video-game sector, has been struggling with a worse-than-expected transition to new video-game technology. Because of a sharp falloff in sales of games for older game hardware, overall industry revenue has been down over the last year. Meanwhile, investments in developing games for new game systems have been boosting costs industrywide. In the just-completed period, for instance, THQ's sales of games for Sony's ( SNE) PlayStation 2 and Microsoft's ( MSFT) Xbox fell 41% to $35.6 million and 81% to $8.1 million, respectively. Excluding costs related to stock options, THQ would have lost $10.5 million, or 16 cents a share, in the just-completed period. The consensus view of analysts polled by Thomson First Call was for a loss of 20 cents a share -- sans stock-options costs -- on sales of $128.4 million in the quarter. In May, the company
forecast a pro forma loss for the quarter of 21 cents a share on $125 million in sales. Looking forward, THQ said that it would lose 3 cents a share -- or, excluding options costs, post a penny-a-share profit -- on sales of $195 million in the current quarter. On the top line, that outlook is better than expected, but it falls short of the Street's bottom-line expectations. Analysts had previously predicted that the company would earn 5 cents a share, excluding options costs, on $180.5 million in sales in the current period. In the same period last year, THQ lost $1.4 million, or 2 cents a share, on $142.7 million in sales. The company maintained its full-year outlook. The company is calling for earnings of 74 cents to 84 cents a share -- 90 cents to $1 a share excluding options costs -- on sales ranging from $900 million to $950 million. Shares of THQ closed the regular session off 43 cents, or 1.9%, to $22.12.