THQ Inc. (NASDAQ: THQI) today reported financial results for the fiscal 2011 second quarter ended September 30, 2010, in line with the company’s guidance.
For the fiscal second quarter ended September 30, 2010, THQ reported net sales of $77.1 million, compared with $101.3 million in the prior-year period. On a non-GAAP basis, for the three months ended September 30, 2010, the company reported net sales of $70.4 million, compared with $100.4 million a year ago.
For the three months ended September 30, 2010, the company reported a net loss of $47.0 million, or $0.69 per share, compared with a net loss of $5.6 million, or $0.08 per share, in the prior-year period. On a non-GAAP basis, for the three months ended September 30, 2010, the company reported a net loss of $40.6 million, or $0.60 per share, compared with a non-GAAP net loss of $25.2 million, or $0.37 per share, in the prior-year period.
A reconciliation of non-GAAP to GAAP results is provided in the accompanying financial tables.
THQ President and CEO Brian Farrell said, “This holiday begins the consistent flow of quality products that we’ve been investing in over the past two years. Our December quarter will be led by WWE SmackDown vs. Raw 2011 and our new uDraw GameTablet. Key releases for our March quarter include our new core game franchise Homefront as well as WWE All Stars, UFC Personal Trainer and de Blob 2.”
Farrell added, “We continue to invest in our long-term product pipeline, with the recent eight-year extension of our UFC relationship, and the planned addition of Patrice Désilets to our growing team of talented artists creating new intellectual properties for THQ. Our goal this fiscal year continues to be to position THQ for significant growth in fiscal 2012 and beyond, with high quality core games such as Red Faction Armageddon, Warhammer 40,000: Space Marine, and the next installment of our Saints Row franchise scheduled for release in fiscal 2012. We continue to execute on our strategy of integrating a digital component into all of our key franchises, including downloadable content and games on the iPhone, iPad, Facebook, Xbox LIVE Arcade and PlayStation Network."
Fiscal 2011 Second Quarter Highlights and Recent Developments
- On August 17, 2010, THQ unveiled its new uDraw GameTablet, a first-of-its-kind, innovative new gaming accessory developed by THQ for the Wii™. The uDraw GameTablet is scheduled to hit U.S. retail store shelves on November 14, 2010.
- On October 19, 2010, THQ announced its plans for talented game developer Patrice Désilets, creative director on the Assassin’s Creed franchise, to join the company next summer to form a new THQ-owned development studio in Montreal, Quebec, with the purpose of creating new intellectual properties.
- On October 19, 2010, THQ announced that it extended its exclusive, worldwide agreement with Zuffa, LLC to publish video games and social and mobile applications based on the Ultimate Fighting Championship brand through 2018.
- On October 18, 2010, the company announced a new multi-year licensing agreement with Nickelodeon, granting THQ the worldwide rights to continue to develop and publish video games based on the highly popular SpongeBob™ SquarePants™ franchise.
Business Outlook
Fiscal Year Ending March 31, 2011
The company expects to report non-GAAP fiscal 2011 net sales in the range of $825 - $855 million and a non-GAAP loss per share in the range of $0.10 - $0.20 for the full year.
Fiscal Third Quarter Ending December 31, 2010
THQ expects to report non-GAAP fiscal 2011 third quarter net sales in the range of $300 - $315 million, and non-GAAP earnings per share in the range of $0.20 - $0.30, before applying the "if converted" method of calculating EPS, and $0.19 - $0.27 after applying the "if converted" method of calculating EPS.
Fiscal Fourth Quarter Ending March 31, 2011
THQ expects to report non-GAAP fiscal 2011 fourth quarter net sales in the range of $295 - $310 million, and non-GAAP earnings per share in the range of $0.35 - $0.45, before applying the "if converted" method of calculating EPS, and $0.31 - $0.40 after applying the "if converted" method of calculating EPS.
The "if converted" method of calculating EPS should be applied in any quarter with net income of at least $8 million and in any full year with net income of at least $32 million.
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