Well, i found out the hard way yesterday that I only get 3 posts per day in this trial member mode, so i decided to load up multiple topics in one post. Apologize for the length:
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Sales $35,050
EPS $0.41>>
Todd, your new estimates perplexed me a bit. This quarter we did .37 on 29+ million. You have .41 on 35 million for next quarter, which implies lower margins. Without a lot of analysis, I would think margins would improve somewhat with the many new PC and PSX releases, and much less Quest advertising expenses. What dynamic am I missing, or do you just think the rerelease of N.W.O. will dominate the quarter.
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Question for Todd, or anyone else:
Product development was 1.5 million for q2. Much higher than prior quarters. Any thoughts as to why it was so high.
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There seem to be several PSX delays / cancellations as of late. Bassmasters, Intl Rally, etc. Anyone think THQ is beginning to worry that the PSX market is very saturated and weak games become money losers (or barely profitable?). My observations are that Broken Sword and Ray Tracers were pretty weak games and didn't sell well and I wonder if THQ had to shell out serious reserves to subsidize markdowns to the point where they didn't do much in the long run.
Thoughts?
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Todds q2 vs q3 post:
Q3
<<Brunswick PC and PSX initial shipments
Devil Dice PSX initial shipments
G. Darius PSX initial shipments
Granstream reorders
BASS PC initial shipments
RedJack PC initial shipments
Quest 64 reorders
WCW vs. NWO re-release shipments
World Cup 98 reorders
Mulan initial shipments
Small Soldiers initial shipments>>
Todd - don't you think Nitro continues to sell well enough at retail to generate a few reorders (both here and abroad?)
Also, when comparing q2 and q3, keep in mind q2 reorders of WCW product were very low because of the stuffing at the end of q1, which makes q3 look even better in comparison.
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Todd - You slammed McGowan at GKM pretty hard. Let him have it - look at these even dumber comments from his release:
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o Raising 1998 and 1999 estimates, again. We are raising our 1998 EPS
estimate by $0.05 (less than the 2Q variance) to $2.20. We remain bullish on
THQI's outlook for the balance of the year; however, we are reducing our 4Q
EPS estimate to $0.74 (from $0.84) vs. $0.84 to reflect a higher tax rate and
slightly lower margins. We are raising our 1999 estimate to $2.65 (from
$2.60), reflecting growth off a higher base.>>
What the hell was he using for a tax rate????? Gysi has been saying 33, 33, 33, 33 all along. And Gysi states in this quarter cc to use the margin guidance given at year end, which is surely what he had been using, so now he lowers the margins. Geez.
Chris
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