THQ shares rise with upbeat holiday forecast

SAN FRANCISCO (AP) ? THQ Inc. shares climbed 6 percent Thursday after the video game publisher reported quarterly revenue that beat analyst expectations and gave a positive forecast for the holiday quarter.

THE SPARK: Late Wednesday, THQ said that in its fiscal second quarter its net loss widened as expenses and software and license amortization and royalty costs rose. Excluding one-time items, the Agoura Hills, Calif. company reported a loss of 69 cents per share, which is smaller than the 83 cents per share that analysts polled by FactSet expected.

Sales of the game “Warhammer 40,000: Space Marine,” which was released during the quarter, helped revenue climb 89 percent to $146 million ? much higher than the $99.6 million analysts had hoped for.

THQ also predicted it will report its highest-ever earnings and sales in the current quarter, buoyed by the release several major games, including “Saints Row: The Third” and “WWE ’12.”

In a conference call with analysts, the company gave outlook for adjusted earnings of $1.20 to $1.50 per share on revenue of $510 million to $550 million.

At the time, analysts expected $1.27 per share on $505 million in revenue.

For the fiscal fourth quarter, which begins in January, THQ thinks it will either break even or earn up to 10 cents per share on an adjusted basis. It anticipates $160 million to $190 million in revenue. Analysts expected adjusted net income of 27 cents per share on $193 million in revenue as of late Wednesday.

THE ANALYSIS: In a client note, Cowen and Co. analyst Doug Creutz said third-quarter performance is “critical” for the company, and he is “cautiously optimistic.”

Creutz, who rates the stock “Outperform,” said the company’s outlook for the rest of the year is basically unchanged and seems attainable. He noted that THQ expects to sell more than 3 million copies of “Saints Row: The Third,” less than 3 million copies of “WWE ’12” and around 2 to 2.5 million copies of titles that go with its uDraw GameTablet.

“We think the first two goals are well within reach, though we remain somewhat more cautious on uDraw given our concerns that the title may have been a bit of a flash in the pan last year,” he said.

SHARE ACTION: THQ shares rose 18 cents, or 8.5 percent, to $2.31 in afternoon trading.