Income in the first half of the year was $7.7m (£4.9m), on turnover of $165.4m (£105m) – representing a year-on-year increase of 79 per cent of income, and 44 per cent of turnover. The company expects to realise earnings growth of 35 per cent this year, and has raised its earnings guidance for the year by two cents per share off the back of these latest results.
Somewhat surprisingly, despite the positive results, shares in THQ fell significantly on Thursday, hitting a 15 month low of $21.85 by the close of the stock markets. Many analysts feel that the drop in the stock price is unjustified, and according to Wedbrush Morgan Securities analyst Michael Pachter, it’s got more to do with the perception of the games industry as a whole than with THQs performance in particular. I think that the investment community is starting to look at this whole group as consumer product companies and not as tech companies, he told news agency Reuters.
Many analysts now rate the stock as a positive buy, with the general feeling that it is undervalued. When they get to $20, which is 15 times earnings, they’re ridiculously cheap, according to Pachter.
THQ has had a string of positive news stories in the first half of 2002, ranging from a strong showing at E3 – which included the unveiling of two major new titles, Alter Echo and Red Faction II – to the company’s inclusion at number 39 in the BusinessWeek Hot Growth Companies 2002 list.
The company expects to see revenues of between $515m and $525m overall for 2002, with earnings per share of between $1.24 and $1.31. This would represent a growth in earnings of between 23 and 30 per cent, on revenue increase of 35 per cent over 2001.
Source: Gamesindustry.biz
