THQ reveals $56 million loss in Q3
THQ CEO Brian Farrell started yesterday's third quarter earnings call with investors by saying, "On our last call we told you we anticipated that our third quarter would be the largest in our company's history. Unfortunately, we were wrong."
The company announced a $56 million loss for the quarter ending December 31, 2011, nearly triple the loss of the same period last year. Sales also slumped slightly from $314.6 million to $305.4 million
Despite the success of Saints Row: The Third and WWE '12, the discontinued uDraw tablet took a majority of blame for the company's ill condition.
"Revenues were lower by about $100 million," Farrell explained. "We've got 1.4 million [uDraw units] still in inventory we haven't sold that we planned on selling." He estimated about $80 million of the lost revenue was from units the company didn't sell, and the other $20 million was from lowering the price of what they did sell. He concluded on the topic, "We would have doubled the profitability in the quarter were it not for uDraw."
THQ is currently attempting to make itself a leaner, more efficient entity. Part of its announced realignment includes pay cuts for the top brass, layoffs of 240 people and seeking help for big-ticket items like the Warhammer 40K MMO. The company didn't provide estimates for its expected financial condition for the final quarter of the year.
