Sales Jump at THQ

The company beats holiday-quarter estimates.
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Video games publisher

THQ

(THQI)

rode the coattails of popular animated hits such as

Cars

and

SpongeBob SquarePants

to post strong sales during the holiday quarter.

Sales increased 33% to $475.7 million, from $357.8 million a year ago, edging Thomson Financial expectations of $473.3 million.

Earnings rose to $62.1 million, or 91 cents a share, from $46.9 million, or 71 cents a share, a year earlier.

Excluding stock-based compensation expense, net income for the fiscal 2007 third quarter was $68.1 million, or $1 a share, beating analysts' expectations of 97 cents a share.

Shares of THQ were recently up 41 cents, or 1.3%, to $30.80.

"Our success was driven by our

Disney/Pixar

(DIS) - Get Report

, WWE and

Nickelodeon

(NTDOY)

franchises, as well as strong results for our intellectual properties,

Saints Row

and

Company of Heroes

," said Brian Farrell, president and CEO.

The animated

Cars

motion picture, made jointly by Disney and Pixar (now a unit of Disney), drove video-game sales for THQ and achieved the No. 2 overall console title ranking in the U.S. for calendar 2006, said THQ. The video game has now shipped more than seven million units.

Another hit for THQ was

WWE SmackDown vs. Raw 2007

, which shipped nearly 4 million units, the company said. A THQ original game,

Saints Row

, shipped more than 1.3 million units.

For the year-to-date, seven of THQ's titles have shipped more than one million units, the company said.

THQ grew 2006 U.S. console and PC market share to 7.6%, up from 6.8% a year ago, and ranked third among independent publishers in the U.S.

For the fourth quarter, THQ expects sales of approximately $146 million and earnings of about 14 cents, which includes 5 cents a share of stock-based compensation expense. Analysts were expecting sales of $150.5 million, and earnings of 14 cents a share.

For its fiscal year ending Mar. 31, 2008, THQ expects sales of $1.12 billion to $1.15 billion and EPS of $1.34 to $1.44, which includes 23 cents a share in stock-based compensation expense. Analysts had expected sales of $1.13 billion and earnings of $1.38 a share.