THQ Reports Massive Third Quarter Loss and Names a New CFO

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THQTHQ announced its financial results for its fiscal third quarter ended December 31, 2008. THQ also named a new Chief Financial Officer.
For the quarter, THQ reported a net loss of $191.754 million compared to net income of $15.507 million in the same quarter the previous year. While that's a depressingly large change for the worse, $118.1 million of that number results from a goodwill impairment (things that THQ bought just aren't worth as much as they seemed previously).


THQ's President Brian Farrell mentioned the company's cost-cutting plans: "We have executed on our previously announced plan to reduce our cost structure by $120 million. Given continued economic weakness, we plan to reduce costs by an additional $100 million." In the third quarter, THQ also incurred $30.8 million in charges relating to cancelling titles and closing studios, along with another $9.6 million associated with severance, contract terminations and lease terminations. THQ expects to continue to incur significant costs as part of its continued efforts to improve operations.

The company mentioned several of its best-selling recent games: Saints Row 2 has shipped 2.6 million copies and WWE SmackDown vs. Raw 2009 has shipped 4 million copies and Big Beach Sports has shipped 1.2 million copies.

By region, 59.4% of THQ's revenues are domestic, with the remainder coming from outside the U.S. By platform, The Xbox 360 contributed 25.6% of game revenues, followed by the Wii at 17.8%. PlayStation 2 games contributed more to revenues (13.7%) than the PlayStation 3 (13.2%), with other platforms making up the remainder.

THQ also named Paul Pucino as the company's Chief Financial Officer and Executive Vice President. Prior to joining THQ, Pucino has served as CFO of Classmates Media Corporation, Digital Insight and Tekelec. THQ's former CFO Colin Slade "remains on an indefinite medical leave of absence."

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