THQ Beats Profit Expectations, Acquires Mass Media

Officials from publisher THQ have revealed details of the company’s third quarter financial results ending December 31st, 2006, in which the company saw profits rise by 32 percent, beating market expectations. Profits during the period rose from $46.9 million in the previous year to $62.1 million, or $0.91 per share. Sales increased by 33 percent, from $357.8 million to $475.7 million in 2005, with the company attributing the success to the strong demand for titles such as WWE SmackDown vs. Raw 2007, Cars, Avatar: The Last Airbender, SpongeBob SquarePants and Destroy All Humans! 2. Movie license Cars has now shipped more than seven million units worldwide and was the number one movie title and number two overall console title in the U.S. during the 2006 calendar year. WWE SmackDown vs. Raw 2007 has now shipped over 4 million units, and was also ranked in the top twenty best sellers in the U.S. during 2006. Meanwhile Saints Row, which was recently announced for the PlayStation 3, was the number one selling original IP from a third party publisher on the Xbox 360, with more than 1.3 million units shipped. In total, seven of THQ’s fiscal year-to-date titles have now shipped more than one million units. As a result of these sales, THQ was the number one third party publisher on the Nintendo DS in the U.S. for 2006, as well as the number three PC publisher in the U.S. and the number two in the UK. The company also claimed significant market share raises in Australia, France and Spain. "THQ significantly outperformed the market this year. Not only did we grow our market share in every major territory, we also significantly improved profitability while making investments in our product pipeline and internal development capabilities”, said Brian Farrell, president and CEO of THQ. "Our success was driven by our Disney/Pixar, WWE and Nickelodeon franchises, as well as outstanding results for our two newest owned intellectual properties, Saints Row and Company of Heroes”. The company left its outlook for the quarter ending March 31st unchanged, with expectations of sales of around $146 million and net earnings of 9 cents per share, including 5 cents in stock option expenses. For the full year, the company expects profits of $1.00 per share on sales of around $1 billion. For the fiscal year 2008, the publisher is forecasting profts of $1.11 to $1.21 per share, on sales of between $1.12 billion to $1.15 billion. At the same time the company also announced that it has acquired developer Mass Media, Inc., which has previously handled the PlayStation 2 conversions of the two Full Spectrum Warrior games for THQ. The developer will join THQ’s existing group of fifteen internal studios, including Relic Entertainment and Volition. "We have aggressively expanded THQ's internal Studio System with a focus on creating innovative, new intellectual properties that take full advantage of the latest gaming technologies," said Jack Sorensen, executive vice president of worldwide studios, THQ. "Mass Media brings a wealth of gaming expertise to our talented, extremely collaborative Studio System."