THQ today lowered its guidance for the current quarter and full current fiscal year 2003.
The company cited the following factors:
A $1.5 million write-off of inventory and related charges for "WWF"-branded games, which the company is precluded from shipping pursuant to an action by the World Wide Fund for Nature against World Wrestling Entertainment
A $3.2 million charge related to discontinued products
Lower-than-expected sales of Red Faction II
Lower-than-expected sales of GameCube games
Smaller orders from retailers as stores shift to more effecient inventory management systems
A $2 million charge related to the settlement of a unspecified class action lawsuit. Excluding the charges, THQ executives said the company will post revenue of $215-$220 million, and net profits of 30-33 cents a share. Analysts had expected much higher results of $263 million in revenue and earnings of 93 cents per share. For the year ending December 31, 2002, THQ anticipates revenue of $478-$483 million and net income of 68-71 cents per share. THQ also lowered its guidance for Q1 2003, and full 2003 fiscal year. Shares of THQ closed near a 52-week low, at $12.22.
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