Company Town

The business behind the show

« Previous Post | Company Town Home | Next Post »

Saints Row, UFC push THQ stock higher

April 18, 2012 |  1:16 pm

UFC Undisputed 3

THQ Inc.'s shares jumped 33% after the Agoura Hills game publisher disclosed that its fourth-quarter financials would be less bleak than expected.

Bolstered by stronger sales of Saints Row: The Third and UFC: Undisputed 3, THQ estimated that revenue for the quarter ended March 31 will likely come in between $160 million and $170 million, up from the company's previous outlook of $130 million to $150 million.

In addition, the company expected smaller losses, between 10 cents and 20 cents a share, compared with earlier expectations for 35 cents to 50 cents.

The news sent THQ's shares rocketing 46% to 66 cents immediately following the announcement before leveling off at 60 cents, up 33% by mid-afternoon in New York.

Analysts noted that the stronger results help give THQ a longer lifeline by fortifying its cash pool. The company now expects to have $76 million in cash, three times higher than previously expected, said Edward Williams, an analyst with BMO Capital Markets.

"While the company still has many hurdles to clear before it is out of the dark, it's clearly beginning the ... year in a better position than we had anticipated," Williams wrote in a note to investors.

Wednesday's news was a rare spot of sunshine for an otherwise dark chapter in THQ's 23-year history.  

THQ hit a particularly rough patch last year after several big bets failed to pan out, including uDraw, Red Faction and several licensed kids games. As the company's cash reserves drained to dangerously low levels, THQ has laid off more than 550 people — about a third of its workforce — since August. 

The company has also canceled multiple projects and shuttered six of its 11 development studios to conserve money, according to Gaming Business Review.

THQ credited the recent uptick to Saints Row: The Third, a mobster shooter franchise which shipped 4 million copies and raked in higher-than-expected revenue from sales of additional digital game content. It also said UFC: Undisputed 3, released in February, is selling better than expected, although it did not disclose sales figures for the title.

It's expected to do so on May 15, when the company has scheduled its fourth-quarter earnings announcement.

RELATED:

THQ closes studios, sheds jobs

THQ to lay off 240 people, dock CEO pay

Once worth $2 billion, THQ market value slips below $35 million

— Alex Pham

 

 

Comments 

Advertisement










Video