THQ cuts outlook for the year, plans layoffs

AGOURA HILLS, Calif. - Video game publisher THQ Inc. on Wednesday said it cut its profit estimate for the fiscal year and announced a major restructuring which includes the reduction of at least 250 jobs.

THQ expects a profit of 5 cents to 15 cents per share for its fiscal third quarter ending Dec. 31. Analysts polled by Thomson Reuters expect a profit of $1.09 per share in the third quarter.

THQ says it expects breakeven results in the second half of the fiscal year, which implies a fourth-quarter loss of 5 cents to 15 cents per share.

That would leave the company with a full-year loss of $2.14 per share, equal to what THQ recorded in the first half of the year. It includes an accounting charge of $1.21 per share posted in the fiscal second quarter.

In July, THQ forecast a full-year profit of 80 cents to 90 cents per share.

Analysts forecast a profit of 68 cents per share in the full year.

The company also cut its full-year revenue estimate to a range of $875 million to $900 million from a prior outlook of $1.14 billion to $1.18 billion.

Analysts expect full-year revenue of $1.12 billion.

THQ expects sales to range from $400 million to $420 million in the third quarter. Analysts expect third-quarter revenue of $566.4 million.

THQ said it has pushed back the release of new key titles into the next fiscal year, including "Red Faction: Guerrilla" and "Darksiders: Wrath of War." It said the delay accounted for $125 million of the reduction in its full-year sales projection. It said a stronger dollar lopped another $80 million off its sales forecast, and an expectation for a soft economy and continued weak sales of kids games took another $70 million off its estimate.

The company said it was canceling several titles that were in development, closing five studios, and cutting its product development staff by 250 jobs, or 17 percent of its studio staff. It said it would also streamline its corporate organization.

THQ said that from now on it would focus on "fewer, higher quality titles," and that it cut its fiscal 2010 product development spending by $100 million, which will be $30 million less than it expects to spend in the current fiscal year.

THQ said it would take charges for the changes during the current fiscal year.

The company also reported a worse fiscal second-quarter loss than analysts expected.

Shares of THQ fell $1.06, or 16.2 percent, to $5.49 in aftermarket activity. The stock has ranged from $6.29 to $29.94 over the past year.

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