THQ has fiscal Q4 loss on higher costs

Older titles’ weak performance causes expenses to rise

By Danny King -- Video Business, 5/6/2008

MAY 6 | THQ said today it had a fiscal fourth-quarter loss as it boosted marketing expenses to try to sell weaker-performing older titles and doubled its software amortization costs.

For the quarter ended March 31, the games publisher had a net loss of $34.5 million, or 52¢ a share, compared with net income of $6.5 million, or 9¢ a share, a year earlier. Revenue increased 8.7% to $187 million, the company said today.

Stronger sales of such titles as Frontlines: Fuel of War and WWE Smackdown vs. Raw 2008 weren’t enough to offset a drop in demand for catalog titles, the company said. THQ’s gross profit fell to 56% of revenue from 63% a year earlier.

“In fiscal 2008, we did not achieve our revenue and profit targets, and we are taking aggressive steps to ensure that we significantly improve execution in fiscal 2009 and beyond,” said THQ chief executive officer Brian Farrell.

The company was expected to lose 6¢ a share on revenue of $200.8 million, the average analyst estimates in a Thomson Financial survey. Shares of the company, which reported earnings after the stock market closed, fell about 6% in extended trading today.