informa
3 min read
article

THQ Raises Sales Outlook To $1 Billion

Officials from publisher THQ have announced a raised quarterly and annual outlook for the year, following better than expected sales of licensed franchises such as Cars and WWE SmackDown vs. Raw 2007 - now hopes to hit $1 billion in yearly s
Officials from publisher THQ have announced that the company has raised its quarterly and annual outlook for the year, following better than expected sales of licensed franchises such as Cars and WWE SmackDown vs. Raw 2007. The company raised its sales outlook for the third quarter, ended December 31st, to $475 million, from its previous estimate of $400 to $425 million. Earnings were expected to be 91 cents a share for the same period, up from a previous estimate of 65 to 70 cents a share. For the fourth quarter, the company expects to see sales of about $146 million, on earnings of 9 cents per share. This prediction was based on the delay of an unannounced PlayStation 3 title to the first quarter of fiscal 2008. Revenues for the current financial year were upgraded from $925 to $975 million to about $1 billion. Earnings increased from previous predictions of 77 to 87 cents a share to $1 per share. The news follows claims from THQ on Tuesday that its internal investigation had found “no evidence of fraud or misconduct” in terms of historical stock option grant practices. "THQ's platform strategy served us very well this holiday with stronger than expected sales of mass-market franchises WWE SmackDown vs. Raw 2007, Disney/Pixar Cars and Avatar: The Last Airbender across key current and next-generation hardware systems," said Brian Farrell, president and CEO of THQ. "This performance combined with our successful original property launches exclusively for next-generation systems have positioned THQ to achieve the significant milestone of $1 billion in sales for fiscal 2007." The company expects to report its fiscal third quarter results before market open on Friday, February 2, 2007, and to host a conference call to discuss these results and the company's fiscal 2008 business outlook later that day. [UPDATED: 9:45am PST] Lazard Capital Markets' Colin Sebastian has added his reactions to THQ's news, saying increasing THQ's price target to $39 from $38. The group attributed the December quarter results to "THQ’s exposure to popular Nintendo platforms (DS portable and new Wii console) and solid sales of PS2 software." Lazard added that the group looks forward to a strong 2008 software lineup with Supreme Commander, Pixar's Ratatouille, Frontlines Fuel of War, as well as sequels of franchises WWE Wrestling, Juiced, Stuntman and Nickelodeon titles, but warns of slight risks due to rising development costs, and the recent THQ vs. WWE license battles. [UPDATED: 1:26pm PST] Wedbush Morgan's Michael Pachter has commented on THQ's news in a research note to investors, noting that the firm has raised its fiscal 2007 estimates for THQ from $980 million to $1.0 billion, and has elevated the company's 12-month target price from $36 to $42. The group commented that it believes the discrepancy between Wedbush's previously stated fiscal 2007 estimates and company guidance is tied to THQ’s plans to amend its prior reported first and second quester results now that it has completed its internal stock options investigation. “With THQ close to resolving its options investigation and the strength in the company’s business providing it with sales momentum,” wrote Pachter, “we are more confident than ever about the company’s prospects for FY:08, and have raised our FY:08 estimates to reflect continued solid execution.”

Latest Jobs

Disbelief

Chicago, Illinois
05.10.22
Producer

Build a Rocket Boy Games

Edinburgh, Scotland
05.12.22
Lead Animation Programmer

Windwalk Games

Austin, Texas
05.16.22
Game Designer

Sucker Punch Productions

Bellevue, Washington
05.10.22
Campaign Director
More Jobs   

CONNECT WITH US

Register for a
Subscribe to
Follow us

Game Developer Account

Game Developer Newsletter

@gamedevdotcom

Register for a

Game Developer Account

Gain full access to resources (events, white paper, webinars, reports, etc)
Single sign-on to all Informa products

Register
Subscribe to

Game Developer Newsletter

Get daily Game Developer top stories every morning straight into your inbox

Subscribe
Follow us

@gamedevdotcom

Follow us @gamedevdotcom to stay up-to-date with the latest news & insider information about events & more