Shares in THQ Inc. slipped nearly 5 percent after the videogame developer released lower-than-expected earnings flanked by a lower forecast.
THQ reported net income of $6.5 million (9 cents per share) for the fourth quarter ended March 31, a turnaround from a net loss of $8.6 million (-14 cents) from the same period a year earlier. THQ credited strong sales of its "Cars" and "WWE: SmackDown vs. Raw" video games. However, the results, which include a charge of 6 cents for options-based compensation, were off analysts expectations of 14 cents per share.
Revenue for the Agoura Hills-based videogame developer jumped 16 percent to $172 million, beating Wall Street's expectation of $150 million.
"During a challenging hardware transition, THQ significantly outperformed the market in our major territories," said Brian Farrell, the company's president and chief executive. The video game industry is shifting to the next generation of consoles that include the Nintendo Wii and Sony's PlayStation 3, both released last year.
THQ also reduced its first quarter projections to a loss of 26 cents per share, excluding stock option compensation costs of 5 cents per share; analysts had expected a 10-cent loss. THQ said it expects sales of $110 million, also below analysts' expectations of $147 million.
However, the company is still holding to a annual earnings forecast of $1.34 to $1.44 per share excluding stock options costs of 23 cents on sales of $1.12 billion to $1.15 billion. That's roughly in line with analysts' projections of $1.38 per share on sales of $1.15 billion.
Shares fell $1.65, or 4.8 percent, to $33.02 in afternoon trading Friday on the Nasdaq.
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