THQ's 'Less-Bad' Guidance, Huge Short Interest To Be Wild Card (THQI)

THQ Inc. (NASDAQ: THQI) is no longer one of the top video game publishers that affects the entire video game sector, but due to stronger Saints Row sales of more than 4 million units it is trying to signal that things were not as bad as previously thought.  UFC® Undisputed® 3 sales were also slightly above its expectations.

The company is raising guidance and it expects to report net sales of $160 million to $170 million (non-GAAP) and the previous guidance was only a range of $130 million to $150 million.  THQ now expects a fiscal fourth quarter non-GAAP net loss per share in the range of -$0.10 to -$0.20 against a prior loss range of -$0.35 to -$0.50.

Thomson Reuters had a consensus expectation of -$0.41 EPS on $142.3 million in sales.  Unfortunately, this will not make the 2012 year-end in March a profitable one.  Shares closed at $0.45 on Tuesday at a year-low and the 52-week range is $0.45 to $4.67. THQ even raised its year-end cash balance forecast too $76 million as a result of the sales.

Investors should keep in mind that the short interest has been incredibly high here with some 13,785,473 shares listed in the most recent short interest as some believe the company is close to being doomed.  That short interest represents about 11 days to cover.

JON C. OGG