THQ Inc. (THQI:US), maker of video games including ``Destroy All Humans!'' said third-quarter profit fell 24 percent because the company failed to produce any blockbuster titles.
Net income in the fiscal third quarter declined to $47.6 million, or 72 cents a share, from $62.9 million, or $1.05, a year ago, Calabasas Hills, California-based THQ said in a statement today. Sales fell 11 percent to $357.8 million. Profit and revenue both beat analysts' expectations.
Revenue topped estimates on sales of 2.2 million copies of ``WWE Smackdown vs. Raw 2006,'' Janco Partners Inc. analyst Mike Hickey said today. THQ hasn't had a follow-up hit to ``The Incredibles,'' which has sold 6 million copies since its release during the 2004 holiday shopping season. The company is delaying the release of some games, citing a shortage of Microsoft Corp (MSFT:US)'s Xbox 360 machine.
``They are showing strength in a difficult marketplace,'' said Hickey, who rates the stock ``market perform'' and said he doesn't own any.
Shares of THQ rose 34 cents to $26.54 at 4 p.m. New York time in Nasdaq Stock Market composite trading. They have gained 45 percent this past year.
The company was expected to earn 65 cents, the average estimate of 21 analysts surveyed by Thomson Financial, on sales of $319.4 million.
THQ today forecast fiscal fourth-quarter earnings of 2 cents a share on sales of $135 million. Analysts expected 11 cents on sales of $148.9 million. In its next fiscal year, THQ said it will earn as much as $1 a share on sales of as much as $950 million.
The company got 43 percent of its sales from games made for Sony Corp. (6758)'s PlayStation 2 machine and 4.5 percent from Microsoft's Xbox consoles. Sony's Playstation 3 is scheduled for release later this year. THQ hasn't yet begun making programs for that machine or the Xbox 360, which has been plagued by shortages, spokeswoman Liz Pieri said. The company's first Xbox 360 game, ``The Outfit,'' will be out in March, she said.
``This is a transition period,'' Chief Executive Officer Brian Farrell said today in an interview. `` We can sell more software if there's more hardware.''
The company had focused on producing popular games like ``The Incredibles'' for what Farrell calls the mass market and is shifting to products for avid fans, or ``gamers.'' One title targeting such fans, ``Saints Row'' for Xbox 360, will be released in September, Pieri said.
Electronic Arts Inc. (EA:US), the world's biggest video-game maker, also forecast sales for the current quarter that missed analysts' estimates. The Redwood City, California-based company last night said third-quarter profit fell because a shortage of Microsoft Corp.'s Xbox 360 machines curbed sales.
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