THQ issues revised earnings forecast

THQ has issued a revised forecast for its Q4 2006 earnings, anticipating an increase in overall sales but a net loss on earnings, citing development changes and a poor performance of key titles as the reason for the change.

For the final quarter, ended March 31st, THQ expects net sales of USD 150 million - a USD 15 million increase on previous estimates. However, the previous guidance of a net income of USD 0.02 per diluted share has been revised to a net loss of USD 0.13 per diluted share.

The company has recently altered its development strategy for the WWE wresting titles, which will no longer be developed in-house. As a result of the new agreement with Yukes - in which THQ holds a minority share, fourth quarter loss projections include USD 0.08 per share for additional software development costs.

The company has also cited additional development costs and a poor sales performance of Full Spectrum Warrior: Ten Hammers, the Q4 loss including USD 0.06 per share in relation to this title.

Despite the lowered earnings guidance for the quarter, THQ has reaffirmed its projection for the full fiscal year ending 31st March 2007, anticipating net sales of USD 900-950 million, and net earnings of USD 0.90-1.00 per diluted share.

"As we continue to manage through the platform transition, our outlook for fiscal 2007 and the long-term remains positive," stated Brian Farrell, THQ president and CEO. "We expect significant video game industry growth over the next several years and believe we are well positioned to continue to gain share in this expanding market."

THQ is expected to release its official Q4 earnings on May 5th, 2006.