Skip to main content

Profit Slumps at THQ

The gamemaker guides lower for the current quarter.

Lacking an


boost, sales and earnings slumped in the holiday quarter at




The company's results still came in ahead of the Street's estimates. But in its report before the bell on Friday, the company predicted much worse-than-expected results in coming periods.

Investors seemed to shrug off the company's glum guidance. In recent trading THQ's stock was up 26 cents, or 1%, to $26.46.

Scroll to Continue

TheStreet Recommends

In THQ's fiscal third quarter, which ended Dec. 31, it earned $47.6 million, or 72 cents a share. That was off the year-ago period, when the company earned $62.9 million, or $1.05 a share.

Sales fell 11% to $357.8 million. In the year-ago period, THQ's results were augmented by sales of its video game based on the Pixar movie

The Incredibles

; in the just-completed quarter, the company didn't have a comparable title.

Even lacking that, the company did well, relative to expectations. On average, analysts polled by Thomson First Call were expecting the company to earn 65 cents a share in the just-completed period on $319.4 million in sales. The company itself had previously guided to a profit of 65 cents a share on $320 million in sales.

But the company cautioned investors to lower their expectations for the current quarter and for next year. In its fiscal fourth quarter, for instance, THQ expects to earn just 2 cents a share on $135 million in sales.

Wall Street had previously predicted the company would earn 11 cents a share in the current quarter on sales of $148.9 million. And in the same period last year, THQ earned $10.1 million, or about 16 cents a share, on $171.9 million in sales.

For fiscal 2007, THQ is expecting to earn 90 cents to $1 a share on sales of $900 million to $950 million. In contrast, analysts had predicted the company would earn $1.02 a share in its next fiscal year on $982.4 million in sales.