THQ Inc.’s (NASDAQ:THQI) loss widened in the first quarter, as the company’s results were dragged down by higher costs. THQ, Inc. is a worldwide developer and publisher of interactive entertainment software for all popular game systems.
THQ Earnings Cheat Sheet for the First Quarter
Results: Loss widened to $38.4 million (56 cents per diluted share) from $30.1 million (loss of 44 cents per share) in the same quarter a year earlier.
Revenue: Rose 30.7% to $195.2 million from the year earlier quarter.
Actual vs. Wall St. Expectations: THQI reported an adjusted net loss of 94 cents per share. By that measure, the company fell short of the mean analyst estimate of a loss of 59 cents per share. It beat the average revenue estimate of $172.4 million.
Quoting Management: “We are disappointed in our first quarter financial performance. Sales of Red Faction: Armageddon and our licensed kids titles were below our expectations, and the late release of UFC Personal Trainer also adversely impacted the quarter,” said Brian Farrell, THQ President and Chief Executive Officer. “Despite a light first half, we are looking forward to a strong and profitable second half, including what we expect to be the biggest third quarter, both in revenue and earnings per share, in our company’s history, with proven franchises Saints Row, WWE and the uDraw GameTablet, all launching in November.”
A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the first quarter of the last fiscal year, which saw a 38.7% decrease.
The company fell short of forecasts after beating estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 5 cents, and in the third quarter of the last fiscal year, it was ahead by 9 cents.
Gross margins grew 5.2 percentage points to 28.2%. The growth seemed to be driven by increased revenue, as the figure rose 30.7% from the year earlier quarter while costs rose 21.9%.
Competitors to Watch: Electronic Arts Inc. (NASDAQ:ERTS), Microsoft Corporation (NASDAQ:MSFT), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Activision Blizzard, Inc. (NASDAQ:ATVI), KONAMI CORPORATION (NYSE:KNM), Majesco Entertainment Co. (NASDAQ:COOL), The Walt Disney Company (NYSE:DIS) and Sony Corporation (NYSE:SNE).
(Source: Xignite Financials)