Video Game Earnings Trifecta: EA, THQ, Midway (ERTS, THQI, MWY)

After today’s close, we’ll see earnings out of three video game publishers.  Electronic Arts (NASDAQ:ERTS), THQ Inc. (NASDAQ:THQI), and Midway Games (NYSE:MWY) all report today.  The key to remember here is that calendar Q3 is not generally as dead as calendar Q2 for video game makers, but that calendar Q4 guidance is perhaps the most important out there.

Electronic Arts (ERTS) is still the kahuna of the video game group.  Analysts are looking for $0.20 EPS on $896 million revenues, and next quarter $0.94 EPS on $1.61 Billion in revenues.  Fiscal March-2008 estimates are $1.15 EPS and $3.77 Billion in revenues.  EA sort of lucked out after the delay of the new Grand Theft Auto game earlier this year, particularly since its near simultaneous launch of Halo 3 would have sucked up much of the available gaming spending money and gaming time.  One key issue will be what the company telegraphs out of the coming BioWare acquisition.  With the acquisition and the new launched of Hellgate:London, The Simpsons, Command & Conquer, and The Orange Box, EA is getting farther and farther away from its old quasi-dependence upon Madden Football and The Sims franchise.

THQ Inc. (THQI) is expected to post -$0.02 EPS and $229.4 million in revenues, but next quarter estimates are $0.70 EPS and $491.1 million in revenues.  Fiscal March-2008 estimates are $0.85 EPS and $1.07 Billion revenues.  The company’s recent guidance already muted expectations.

Midway Games (MWY) is the runt of the group, although it’s always interesting to see how the Sumner Redstone game empire is chugging along through what has been perpetual losses in the past and ahead.  Analysts are looking for -$0.33 EPS on revenues of $39.2 million.  Shares are down 2% at $3.04 today, and the 52-week trading range is $2.96 to $9.18.  Its market cap is only $277 million.

Activision (ATVI) is set to report next week.

Jon C. Ogg
November 1, 2007