Game publisher THQ Inc. continued to struggle last quarter as its ambitious turnaround efforts have yet to bear fruit.
The Agoura Hills company — whose franchises include UFC Undisputed, Saints Row and uDraw — posted wider losses Tuesday on lackluster sales in its first quarter.
"We are disappointed in our first-quarter financial performance," said THQ's chief executive, Brian Farrell. "Sales of Red Faction: Armageddon and our licensed kids titles were below our expectations."
The company reported a net loss of $38.4 million, or 56 cents a share, on sales of $195.2 million in the quarter ended June 30. It had lost $30.1 million, or 44 cents a share, on $149.4 million in revenue a year earlier.
THQ's shares, which closed unchanged at $3.20, lost a penny in after-hours trading following the earnings release. It had not traded that low since early 2009, when the stock fell as low as $2.24 in February 2009.
The results showed that THQ's multiyear plan to cut costs and reposition its business around high-quality games for hard-core players, such as Homefront, is off to a difficult start.
The company's latest big game, Red Faction: Armageddon, which debuted June 7, sold fewer than 100,000 copies in the U.S. in June.
Farrell predicted that THQ would reap record sales and profit in the Christmas quarter, which would take the sting away from the disappointing first quarter.
As a result, the company kept its previously released annual revenue forecast at $925 million to $1 billion, despite the shortfall of Red Faction sales. THQ, however, said its earnings will range from a loss of 30 cents a share to a gain of 10 cents, significantly lower than the company had previously predicted.
"We have made a lot of progress in repositioning THQ," Farrell said. "We still have a lot of work ahead of us."