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THQ Q4 Finances To "Exceed Expectations"

Jonathan Lester
Financials, THQ

THQ Q4 Finances To "Exceed Expectations"

Back In The Black

THQ's financial position has been something of a hot topic of late, with even Take Two CEO Strauss Zelnick suggesting that their rival wouldn't "be around in six months" after massive layoffs and torrid share prices put the publisher in jeopardy. However, THQ has now prepared investors for a pleasant surprise: their Q4 results will apparently "exceed expectations" across the board.

THQ expects to end the financial year with triple the cash balance than they'd previously forecast, owing to incredibly strong sales of Saints Row: The Third and UFC Undisputed 3. What's more, they haven't logged any outstanding borrowings.

THQ expects to report cash and cash equivalents of approximately $76 million at March 31, 2012, three times higher than the previous expectation for its year-end cash balance, due to better-than-expected operating results in the fourth quarter, as well as earlier-than-anticipated cash receipts.

Additionally, the company ended the quarter with no outstanding borrowings on its $50 million credit facility, and did not borrow against the facility during the quarter. The company expects to utilize a substantial portion of its cash and cash equivalents as well as its credit facility as it launches its slate for the 2013 fiscal year, beginning with Darksiders II.

On the flip side, though, THQ does expect a share price decrease, from $0.35-$0.50 down to $0.10-$0.20.

With luck, this should allow THQ to get back to publishing Darksiders II and Metro: Last Light in relative financial security.

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