THQ Posts Holiday Quarter Loss, uDraw Beats Expectations

Though THQ saw lower revenues in the 2010 holiday quarter, the company says better-than-expected shipments for the Wii's uDraw tablet helped the company beat expectations for the period. [UPDATE: Stock drops.]
Though THQ saw lower revenues and significant losses in the 2010 holiday quarter, the company says better-than-expected shipments for the Wii's uDraw tablet helped the company beat expectations for the period. The last quarter of 2010 saw a nearly $15 million net loss for the publisher, with total revenues down nearly 12 percent from 2009, to $314.6 million, as THQ shipped approximately 2.7 million units of WWE SmackDown vs. Raw 2011 during the quarter. But the uDraw tablet was a ray of light in the results, shipping 1.2 million units through the end of the year since its release November 14. The company had initially forecast 1.25 to 1.3 million shipments for the hardware for the entire fiscal year, which ends March 31. "This owned intellectual property provides THQ with a new growth opportunity focused on innovative and creative game play," said THQ President and CEO Brian Farrell, in a statement. The uDraw's success helped Wii titles represent 44.9 percent of the company's sales for the quarter, up from just over 25 percent for the same quarter in 2009. Revenues from software for all other systems was down on both a percentage and raw dollar basis compared to 2009, including a significant 35 percent dip in Nintendo DS revenues. Holiday quarter results were also impacted by a decision not to release certain Western free-to-play games in Asian markets, including Company of Heroes Online and WWE Online. Looking forward, THQ cited "recent industry trends" in lowering expectations for its future kids-movie-based games by over $30 million. The company said it will be focusing its efforts in this segment on new hardware like the Microsoft Kinect, PlayStation Move, Nintendo 3DS and its own uDraw tablet, as well as online networks and mobile devices. [UPDATE: THQ shares dipped 12 percent to $5.60 in after-hours trading following today's earnings statement, likely owing to a earnings forecasts that were below analyst expectations for the upcoming quarter, as noted by the Associated Press. On the subsequent earnings call, Farrell revealed a fall 2011 release date for the anticipated Saints Row 3 in the call, as noted by VG247, as well as a calendar 2013 release window for Guillermo del Toro's Insane. A sequel to Darksiders, Warhammer 40K MMO Dark Millennium Online and Devil's Third are all targeted for the 2013 fiscal year, which starts in April 2012.]

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