THQ Reports Large Annual Loss

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THQ reported its financial results for its fourth fiscal quarter and year ended March 31, 2008.
For its fourth quarter, THQ reported a net loss of $34.531 million, compared to net income in the same quarter the previous year of $6.495 million. For the year, THQ reported a net loss of $35.337 million compared to net income in the previous year of $68.038 million. For the year, just under $22 million of that loss related to stock based compensation, deferred revenue and the development costs for Frontlines: Fuel of War. While THQ's latest games met or exceeded expectations during the latest quarter, THQ "experienced weaker-than-expected sell through of some of its previously released titles, which resulted in greater-than-anticipated price protection and reserves, as well as increased software amortization expense during the quarter."

Clearly, this was not a good year for THQ. The company's President and Chief Executive Officer, Brian Farrell, said, "In fiscal 2008, we did not achieve our revenue and profit targets and we are taking aggressive steps to ensure that we significantly improve execution in fiscal 2009 and beyond. Going forward, we are focused on three key initiatives. We are rolling out a stronger slate of products. We have put in place and are executing against initiatives to improve our product quality and competitiveness. We are also realigning our cost structure to generate significant operating leverage in fiscal 2009."

For the fiscal year 48.8% of revenues came from the U.S., with the remainder coming from international business. By platform, 24.5% of revenues came from PlayStation 2 games, 22.0% came from DS games, 12.6% came from Xbox 360 games and 9.1% came from PC games (with other platforms making up the remainder).

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