THQ posts big earnings, bigger losses

money bag - Image 1THQ has unveiled its financial scorecard for this fiscal year's opening quarter and though it looked pretty at first, things quickly went south as we checked out how much it lost. Apparently, bigger revenues don't necessarily translate into bigger profits as you'll find out in the full article up ahead.

THQ - Image 1 

While most publishers in the video game industry are reporting decent to good earnings in Q1 of 2008, the story is a bit different for THQ as it dipped well into the red zone with triple the losses it incurred in the same period last year.

THQ finished the quarter with US$ 137.6 million, US$ 33.1 million better than last year's total. A lot of this can be credited to multiplatform hit WALL-E which was developed in cooperation with Pixar. The IP sold over a million copies despite lukewarm critical reactions.

As good as the WALL-E efforts went, development costs sapped up the earnings and gave THQ a staggering US$ 27.2 million in deficits. This is triple of last year's losses, but THQ isn't fazed just yet.

CEO Brian Farrell said in a statement that THQ is still well on track to post earnings this year with a good number of their products still to come. Flagship franchises such as WWE Smackdown vs Raw 2009 and Saints Row 2 are waiting on the wings, and games like Red Faction Guerrilla, Darksiders: Wrath of War, and Legends of Wrestlemania are expected to do well.

THQ stands firm on its projection of  US$1.15 billion to US$1.175 billion in revenues by the end of the fiscal year. We'll see if that statement can vindicate the game maker when the dust settles.

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