Game Maker THQ Scores With Record 4th Quarter
Spurred by the success of its popular wrestling video game, THQ Inc. on Wednesday said it scored record gains for the last three months of 1997.
The Calabasas-based game developer’s fourth-quarter earnings rocketed to $6.2 million, or 84 cents per diluted share, up from $1 million, or 19 cents a share, in the year-earlier quarter. The performance beat the 48-cent average estimate of analysts polled by IBES International Inc. Sales surged 139% to $49 million.
Analysts attributed THQ’s success to an expanded product line that’s riding a wave of demand for interactive games for personal computers and “next generation” consoles--Nintendo 64 and Sony Corp.’s PlayStation. THQ is also a leading developer of games for older platforms, such as Gameboy and Super Nintendo, which many other developers have abandoned.
Last year, THQ released 34 games covering a range of themes, from sports to role-playing. Popular titles include “NBA Live 98” and “Madden NFL.” Its holiday-season hit, “WCW vs. NWO: World Tour,” is the latest installment of games based on World Championship Wrestling.
“They have a much better line of products today compared to a few years ago,” said analyst Lewis Alton of L.H. Alton & Co. in San Francisco. “It’s like a baseball team. If you pick better players, you win games.”
In Nasdaq trading Wednesday, THQ shares soared $5.50 to a 52-week high of $29.50.
THQ President Brian Farrell said the company’s strategy is to offer a variety of games.
“It’s a hits-driven industry,” Farrell said. “Last year it was wrestling. In 1998, it may be role-playing. . . .”
THQ, a 7-year-old company, has tripled its work force in the last five years. Total sales have soared from $13 million in 1994 to $89 million last year.
