THQ Beats Earnings Expectations, But Stays In Red

Officials from major publisher THQ have announced the financial results for the first quarter of the company’s fiscal year, ended June 30th, with sales results ahead of expectations, despite an overall loss for the company Over the last three months, the company saw net sales of $138.8 million, exceeding the company’s guidance of $125.0 million and attributed to better than expected sales of movie tie-in Cars and MotoGP 06 on the Xbox 360. The results compare to net sales at the same time last year of $158.0 million. Despite the positive sales, the company reported a net less for the quarter of $12.1 million, or $0.19 per share, compared to a loss of $4.0 million at the same time last year. On a non-GAAP (Generally Accepted Accounting Principles) basis, excluding equity-based compensation expense, the net loss was $10.5 million, or $0.16 per share. The company had been expecting a net loss of $0.25 per share ($0.21 for non-GAAP). The company reaffirmed previous guidance for the 2007 full fiscal year of net sales in the range of $900 million to $950 million, and net income in the range of $0.90 to $1.00 per diluted share. For the second quarter the company expects net sales of approximately $195 million and net income of $0.01 per diluted share. Brian Farrell, THQ president and CEO commented, "With the roll-out of Cars overseas and the launch of our key brands on next-generation hardware, we expect to outperform the market in what is widely viewed as a transition year for the industry." He added "Our confidence reflects the strength of THQ's product portfolio, which offers a balance of new original properties for avid gamers on next-generation consoles and Windows PC, including the upcoming Saints Row and Company of Heroes, and multi-platform releases of proven mass-market licensed titles, including games based on Disney Pixar, WWE and Nickelodeon brands."