Good news for those of you who own stock in publisher THQ. Following the company’s announcement of its fourth quarter financials yesterday morning, the firm’s stock jumped from 45 cents to 65 cents per share, a massive 44 percent increase in the span of minutes. Though the stock eventually leveled out at 57 cents, that’s still an impressive gain for a company that has seemingly been on the brink of collapse for the past several months.
So how did THQ turn around its grim financial straits? Simple: The publisher launched genuinely good games that people bought in droves.
Specifically, the company cites higher-than-expected sales of UFC: Undisputed 3 and Saints Row 3 for the turnaround. The latter has sold more than four million copies to date, making it a massive hit — deservedly so, if critical praise is any indicator. As a result THQ expects fourth quarter revenue of $160 to $170 million, despite earlier expectations that the company would pull in a mere $130 to $150 million for the quarter.
Likewise, THQ expects smaller losses than originally predicted. “… between 10 cents and 20 cents a share” reports the LA Times, in contrast with the 35 to 50 cents per share losses the firm initially expected.
This couldn’t come at a better time for the beleaguered publisher. In February we reported on the company’s ongoing financial issues that, due to a host of under-performing releases and poor business decisions, included $55.9 million in losses during the holiday season and a notice from Nasdaq that the company faced being delisted if its shares didn’t hit at least the $1 mark by July 23, 2012. Granted, the company still has a ways to go to avoid that depressing fate, but yesterday’s financial shot in the arm is a very impressive start.
Now the question becomes: “Can THQ’s impending slate of game releases completely turn around the company’s fortunes?” The firm’s upcoming release list, though a bit anemic, does include the highly-anticipated Darksiders II, as well as WWE ’13 and South Park: The Game, both of which should pull in impressive profits by virtue of their respective licenses alone. THQ isn’t out of the woods just yet, but it can see a well-lit clearing in the distance full of friendly deer and cuddly bunny rabbits.
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