Wall Street Gives Thumbs Down to ‘Wall-E’ Games

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Video game developer THQ Inc., which has been languishing under a tumbling stock price, has been hit with a heavy first quarter loss and a gloomy forecast.

The Agoura Hills-based company’s shares tumbled to close at $15.18 on Thursday, a drop of more than 20 percent since mid-July and 30 percent since the beginning of June.

Analysts attributed Wall Street’s reaction to THQ’s delay in game production and lackluster performance of its new games based on Disney movie “Wall-E,” which was expected to sell better than the company’s “Ratatouille” title last year.

“It’s hard to be a company with a small portfolio of average games and that’s what THQ is right now,” said analyst Mike Hickey of Janco Partners.

Hickey said THQ’s portfolio particularly lags behind the upcoming releases of high-quality, sophisticated games such as Microsoft’s “Gears of War II” and Electronic Arts’ “Dead Space,” scheduled to go to market later this year and in early 2009.

What’s more, THQ’s widely anticipated signature title “Saints Row 2” is backed up in production. It was set to be released in the second quarter of this year, but the company announced the game would be pushed back to the holiday season.

“Investors are getting frustrated that execution has been spotty and it’s not improving,” said Arvind Bhatia, analyst at Sterne Agee & Leach.

Last week, the company reported net sales of $138 million during the first quarter, an increase of more than 30 percent from the previous year’s first quarter. Sales were led by more than 1 million copies of the “Wall-E” games, but that number was considered weaker than anticipated.

But the growth in sales was tempered by a loss of $27 million, three times the loss of $9.3 million in the same period in the previous year. For the second quarter, THQ forecast a loss equal to 35 cents to 39 cents a share.

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