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THQ profit up 32% on games for new consoles

February 03, 2007|From Bloomberg News

Video game maker THQ Inc. said Friday that fiscal third-quarter profit rose 32% as sales were boosted by games for Nintendo Co. consoles.

Profit was $62.1 million, or 91 cents a share, for the period that ended Dec. 31, up from $46.9 million, or 71 cents, a year earlier, the Agoura Hills company said. Sales rose 33% to $475.7 million.

THQ benefited from the popularity of Nintendo's wand-wielding Wii console and hand-held DS console. THQ games include "Cars," based on the Walt Disney Co. film, and "Saints Row." Chief Executive Brian Farrell said the company was working on a "Cars" sequel.

THQ said about half of its fiscal 2008 revenue would come from sales of games for so-called next-generation consoles: Microsoft Corp.'s Xbox 360, introduced in 2005, and Sony Corp.'s PlayStation 3 and Nintendo's Wii, both introduced in November.

THQ is increasing development of titles for the Wii and will release 11 new games in the next year. The console outsold PlayStation 3 during the holiday period 1.1 million units to 687,300, researcher NPD Group said.

"We believed it was going to be strong, but it's stronger than we thought," Farrell said.

Excluding costs of about 9 cents a share in noncash stock- based compensation, THQ said profit was $1 a share. On that basis, the company beat its own forecast and analysts' average estimate of 97 cents a share compiled by Bloomberg.

THQ predicted fiscal fourth-quarter earnings of 14 cents a share, excluding 5 cents a share for stock option compensation expenses, on sales of $146 million, both projections below average estimates by Bloomberg. For the full year, THQ predicted earnings of $1.23 a share, excluding a 23-cent-a-share stock option expense, on sales of $1 billion.

Shares of THQ rose 56 cents to $30.95.

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