Earnings: THQ Profit Rises; Expects Wireless Growth Of 45 Percent in 2007

• Posted by Rafat Ali
• Fri 02 Feb 2007 01:57 PM

Video gamer THQ (Nasdaq: THQI) reported increased FY 3Q profits Friday thanks to strong sales of titles such as "Cars", "Saints Row", “SpongeBob SquarePants” and “WWE SmackDown vs. Raw 2007.” THQ said net profit for the quarter that ended Dec. 31 rose to $62.1 million from $46.9 million the same period a year ago, an increase of 32.4 percent.
On its wireless side, still reeling from its flawed strategy couple of years ago, wireless net revenues are expected to show growth of approximately 45% to almost 30 million “as we execute against a product strategy, which leverages THQ’s strong portfolio of owned and licensed properties”, according to the earnings conference call. This excludes the impact of MINICK, which was sold in December 2006.
CEO Brian Farrell on the call: “I think what’s driving our business, certainly it will be driven in part by industry growth. The main addition is the fact under the new agreement with Disney and Pixar, we have rights to the film Ratatouille, which should be a big driver. Under our Star Wars license, we’re going to be bringing Legos Star Wars....As we talked about over the last couple of calls, we said we are going to be realigning our product line and I think we’ve made a lot of progress in that area. And I think that’s what’s going to be driving some of that growth as well. So, yes, we’ve—I think in wireless, the takeaway is we’ve done what we said we were going to do, we’ve realigned the product line, we’ve got the expenses in line with the revenue, and now the challenge is, let’s really drive those revenues.”