Gaming software publisher THQ Inc announced higher Q3 (ended Dec. 31) and FY07 (ending Mar. 31) guidance yesterday and also said it expects to reach the $1 billion net sales milestone for FY07. THQ cited "stronger than expected sales of mass-market franchises" during the holidays "across key current and next-generation hardware systems." Q3 diluted EPS (proforma) is now seen totaling $0.97 ($0.91 GAAP) on revenue of $475 million versus a previous estimate of $0.69 - $0.74 per share ($0.65 - $0.70 GAAP) on sales of $400m - $425m. This tops Thomson's estimate of $0.74 EPS on sales of $425m. A Lazard Capital analyst commented on THQ benefiting from its exposure to popular Nintendo platforms and noted a positive forex impact related to sales in Europe. THQ raised its fiscal Q4 diluted EPS guidance to $0.14 ($0.09 GAAP) with sales expected to be in-line with its previous estimate of $146m. Q4 results will be negatively impacted by the later release of a Sony PS3 game now due out in Q1 FY08. Fiscal '07 diluted EPS was raised to $1.20 ($1.00 GAAP) on sales of $1b, compared to prior estimates of $0.95 - $1.05 ($0.77 - $0.87 GAAP) on sales of $925m - $975m. Early this morning Kaufman Bros reiterated its "hold" rating on THQ, while raising its target to $34 from $28. THQ will report fiscal Q3 earnings on Feb. 2 before the market opens.
• Sources: THQ press release, newratings.com, Reuters
• Related commentary: THQ Raises Fiscal 3Q07 Guidance: Stock May Be Negatively Affected, Gaming Software: THQ Gives Mixed Outlook, Credit Suisse Likes Activision, THQ, Inc. - How Serious Are its Problems?, Game Points: Game Console and Software Stock Update
• Potentially impacted stocks and ETFs: THQ (THQI). Competitors: Electronic Arts (ERTS), Activision (ATVI), Konami (KNM), Take Two (TTWO)
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