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THQ (THQI) shares are posting a fat gain Thursday after the video-game company announced that it has completed a previously announced cost-reduction plan designed to chop its annual spending by $220 million.

THQ CEO Brian Farrell said in a statement that the company’s goal is to return to profitability and generate positive cash flow in the March 2010 fiscal year, and to position the company for long-term sustainable growth.

The company said March quarter results will include $45 million in “realignment expenses,” including $4 million in cash costs. The restructuring include cutting its SKUs by about 20% and closing or selling four of its game development studios. The plan: producer fewer, better games.

Kaufman Bros. analyst Todd Mitchell Thursday morning pounded the table on the stock, repeating his Buy rating and $6 target price, and asserting that there are near-term catalysts ahead for the stock. Weirdly, the note actually says that the company will “soon announce its restructuring is complete,” and of course they announced exactly that Thursday morning. (He should have issued the note a day earlier, I’d say.)

Mitchell projects revenues for FY 2010 of $846 million, up 6% from an estimated $798 million in FY 2009. He sees profits for the year of 16 cents a share, which is down from his old estimate of 45 cents, but still way above the Street at 2 cents. For FY 2009, he expects a loss of $1.50 a share, which would follow a loss of 26 cents in FY 2008.

Mitchell also thinks the stock will benefit from buzz over its UFC 2009: Undisputed game (UFC, of course, is the acronym for Ultimate Fighting Championship, a sport which offers a bit of the old ultra-violence….hmmm…how about a game based on A Clockwork Orange…) Mitchell notes that the UFC is holding a major tournament in Montreal on April 17, with THQ due to report results in early May, and its UFC title due out May 19. “We believe this chain of events could serve as a catalyst to pull shares of THQI out of their current doldrums.”

No doldrums Thursday: THQI is up 32 cents, or 10%, to $3.52.

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Source: THQ: Shares Rise on Profit Projection