Canaccord Genuity Morning Coffee on THQ (THQI): Where’s the Ultimate Warrior When You Need Him?

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THQI Hot Sheet

Rating Summary:
0 Buy, 8 Hold, 0 Sell

Rating Trend: Down

Down

Today's Overall Ratings:
Up: 19 | Down: 16 | New: 82

Canaccord Genuity Morning Coffee on THQ (Nasdaq: THQI): Where’s the Ultimate Warrior when you need him?

THQ investors were hoping they could hit the reset button after the company reported earnings that fell well short of analyst estimates and forecast weaker sales in F2013. Adjusted earnings in Q3 were $0.35 per share, $0.30 below the consensus estimate of $0.65 as sales of casual and family games failed to impress. For Q4, the company expects a net loss of $0.35-0.50 per share on sales of $130-150 million. While no specific sales estimate was provided for 2013, CFO Paul Pucino said F13 sales would be roughly half of the 2012 number. Pucino said the company was going to shrink, a day after it announced nearly 240 layoffs at its various development studios. Additionally, it has been warned by NASDAQ that it may be delisted if it is not able to raise its share price over the next six months. THQ, whose big name games are wrestling and martial arts based, has struggled of late as larger rivals Activision Blizzard (Nasdaq: ATVI) and Electronic Arts (NYSE: EA) have been able to invest more into big budget games while online providers such as Zynga (Nasdaq: ZNGA) have been able to capture a larger share of the free/cheap game market.

Note - shares fell 30% last Friday (Feb. 3), but are rebounding somewhat today, currently up 5.5%

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