THQ Rises After Achieving $220 Million Savings Target
THQ Inc. (THQI), maker of World Wrestling Entertainment video games, gained 11 percent in Nasdaq trading after the company said it “substantially completed” efforts to cut annual spending by $220 million.
The company, based in Agoura Hills, California, is trying to stem four straight quarters of losses by focusing on combat games and titles for kids and families. THQ in February stepped up cost-cutting efforts and announced plans to eliminate a fourth of its staff, or 600 jobs.
The company plans to report $45 million in restructuring costs for the fourth quarter ended last month, including $4 million in severance, according to a statement today. That also includes $41 million in non-cash expenses to cancel some games and write down assets linked to studio closings. Restructuring costs next year will be as much as $10 million.
Analysts project a fourth-quarter loss of 30 cents a share, excluding some items, on sales of $144.1 million, the average of 14 estimates compiled by Bloomberg.
THQ aims to return to profitability in fiscal 2010, according to the statement. Analysts project a profit of 1 cent a share, excluding some costs, on sales of $818.4 million, the average of 16 estimates compiled by Bloomberg.
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