Game maker THQ slashes forecast for year
EmptyAGOURA HILLS, Calif. -- Video game publisher THQ Inc. on Monday slashed its profit and sales outlook for the rest of this year, citing delayed game releases and disappointing sales of its "Stuntman," "Ignition" and "Juiced 2: Hot Important Nights" titles.
The latest editions of "Juiced" and "Stuntman" did not meet THQ's expectations, the company said, and it needs more time to improve these games. Also, the company said it had to book a higher reserve for "price protection," or the cost of reimbursing customers when the price of a game falls.
THQ, which makes games for systems like Microsoft's Xbox and Sony's Playstation, delayed until next year the release of Destroy All Humans, Path of the Furon, Frontlines, Fuel of War and de Blob.
The company lowered its outlook for the rest of the year, now predicting adjusted earnings for the 2008 fiscal year ending March 31 of 80 cents per share on sales of $1.06 billion, compared with a previous forecast for profit of $1.34 to $1.44 per share on sales of $1.12 billion to $1.5 billion.
Analysts are predicting earnings excluding items of $1.36 per share on revenue of $1.13 billion.
Shares fell 88 cents, or 3.7%, to $23 in aftermarket trading, having closed earlier down 3 cents at $23.88. The stock has ranged between $23.65 and $36.76 over the past year.
For the fiscal second quarter ending Sept. 30, THQ expects to post a loss excluding items of 3 cents per share on sales of $229 million. Analysts have forecast profit excluding items of 10 cents per share on sales of $237 million, according to a poll by Thomson Financial.
For the third quarter ended Dec. 31, the company expects to post adjusted profit of 67 cents per share on sales of $490 million, well below Wall Street's expectations for earnings of $1.02 per share on sales of $521.4 million.
For the fourth quarter ended March 31, THQ forecast earnings of 25 cents per share, before items, and sales of $240 million. This outlook reflects THQ's decision to delay the release of "Destroy All Humans!: Path of the Furon" for the PS3 and the Xbox 360; "Frontlines: Fuel of War" for the PS3; and de Blob for the Nintendo Wii and DS until fiscal 2009, instead of releasing as planned in the 2008 fourth quarter.
The company said it expects fiscal 2009 to be a strong year due to a product line-up which includes "Disney/Pixars Wall-E," "Red Faction 3," "Saints Row 2" and its first games based on the Ultimate Fighting Championship.