THQ Updates Fiscal 2008 Outlook

AGOURA HILLS, Calif.--(BUSINESS WIRE)--THQ Inc. (NASDAQ:THQI) today announced updated guidance for its fiscal second quarter ended September 30, 2007, and fiscal year ending March 31, 2008. The updated guidance reflects lower than anticipated sales of two second quarter releases and the company’s decision to release certain products in fiscal 2009 instead of its fiscal fourth quarter ending March 31, 2008.

The company now expects second quarter net sales of approximately $229 million and a GAAP net loss of approximately $0.11 per share, which includes $0.08 per share of stock-based compensation expense. On a non-GAAP basis, excluding stock-based compensation expense, the company expects to report a net loss of approximately $0.03 per share.

For the fiscal third quarter ending December 31, 2007, the company expects to report net sales of approximately $490 million and GAAP earnings per diluted share of approximately $0.61, which includes $0.06 per diluted share of stock-based compensation expense. On a non-GAAP basis, excluding stock-based compensation expense, the company expects to report net income of approximately $0.67 per diluted share.

Revised second and third quarter expectations reflect lower than anticipated shipments of Stuntman®: Ignition™ and Juiced™ 2: Hot Import Nights™. Second quarter results were also affected by higher than expected price protection for these titles.

For the fiscal fourth quarter ending March 31, 2008, THQ expects to report net sales of approximately $240 million and GAAP earnings per diluted share of approximately $0.19, which includes $0.06 per diluted share of stock-based compensation expense. On a non-GAAP basis, excluding stock-based compensation expense, the company expects to report net income of approximately $0.25 per diluted share.

Expected fourth quarter results reflect the company’s decision to release the following products in fiscal 2009 instead of the fourth quarter of fiscal 2008: Destroy All Humans! ®: Path of the Furon™ for the PLAYSTATION®3 computer entertainment system (PS3) and the Xbox 360® video game and entertainment system (Xbox 360); Frontlines™: Fuel of War™ for the PS3; and de Blob™ for the Nintendo Wii™ and DS™.

As a result, for the fiscal year ending March 31, 2008, THQ expects to report net sales of approximately $1.06 billion and GAAP earnings per diluted share of approximately $0.56, which includes $0.24 per diluted share of stock-based compensation expense. On a non-GAAP basis, excluding stock-based compensation expense, the company expects to report net income of approximately $0.80 per diluted share.

“We are disappointed that our latest editions of Juiced and Stuntman did not perform to expectations," said Brian Farrell, president and CEO of THQ. “Because of THQ’s commitment to delivering quality products, we have moved the PS3 and Xbox 360 versions of Destroy All Humans!, and the PS3 version of Frontlines into fiscal 2009. We believe the additional time will enable us to create the best products for our customers."

Farrell added, “Our new title de Blob has generated strong critical acclaim and excitement among gamers. We have decided to schedule this title for global release next fiscal year in order to enhance the game and maximize the opportunity for this new franchise."

Farrell continued, “We are looking forward to this holiday season, with our proven line up, led by WWE SmackDown vs. Raw 2008 on six platforms. Importantly, we expect fiscal 2009 to be a very strong year, as we benefit from a solid product slate, including Disney/Pixar’s Wall-E, Red Faction 3, Saints Row 2 and our first games based on the UFC."

The company will report its fiscal second quarter financial results and outlook in more detail on Thursday, November 1, 2007, after market close.