cut its profit outlook for the third and fourth quarters, due to the cancellation of several games as well as charges related to poorly performing titles last year.
The company reorganized its games portfolio by canceling a version of a game for
lagging PlayStation 3 console and the older PlayStation 2 console, shuttering two titles that faced poor sales, and closing one of its game development studios.
For the third quarter, THQ increased revenue guidance to approximately $509 million from $490 million, reflecting better-than-expected sales of its game
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But excluding stock-based compensation expenses and other charges, the company said it expects EPS of 23 cents. Analysts polled by Thomson Financial are expecting EPS of 66 cents on revenue of $488.18 million.
For the fiscal fourth quarter, THQ guided revenue of approximately $200 million, lower than its previous forecast of $240 million.
Excluding charges, the company expects to report a loss of about 6 cents a share. Analysts were expecting revenue of $238.4 million on earnings of 24 cents a share.
"The revised sales expectations reflect the cancellation of the PS 2 version of
Destroy All Humans: Big Willy Unleashed
, which was previously scheduled to ship in March and lowered expectations for several titles, which launched earlier in the fiscal year," the company said in a statement.
Shares of THQ sank $2.09, or 8.3%, to $23.01 in after-hours trading.
THQ also canceled the PS 3 version of its game
Frontlines: Fuel of War
. It decided "not to pursue" its
game properties, because of their poor sales in 2007 when the games were first released.
The company also closed one of its development studios, Concrete Games, which was working on a yet-to-be announced game title. "The closure will be reflected in the company's fiscal fourth quarter results," THQ said in a statement.
THQ expects to take approximately $20 million in accelerated amortization expenses in the third quarter related to the underperformance of some of its games released last year including
It will also take a noncash charge of approximately $27 million in the third quarter related to the cancellation of some games, its decision to shutter some new titles and costs associated with two unannounced titles for
Xbox 360 and PS3 that had been scheduled for release in fiscal 2010, the company said.