Chris-
I have BASS Masters Classic shipping 100,000 units in Q3
I don't think THQ is currently shipping NWO. I speculate that shipments took place early in Q2, and that the re-release won't come out until the retail inventory is low. This could be in a month or so. Even if THQ does cut the prices (which doesn't need to happen, because the retailers bought the product at $40-45 knowing they could sell it for >$60), THQ's recently beefed-up reserves will absorb any effect. THQ keeps such close tabs on inventory at retailers, that there shouldn't be significant amounts of units in the channel.
crysball-
Thanks for the good word.
Looking at the cash flow statement, one can identify the accrued returns and allowances. I believe that these are indicative of actual charges the company has taken for accomodating retailers and other markdowns. One reason that the reserves balance has increased in the past few quarters is that the accrued returns balance has increased. As long as THQ's reserves balance continues to be greater than actual returns/discounts/etc., the reported earnings won't be affected adversely. In another note, THQ's becoming increasingly conservative with the receivables reserves. In Q4, total reserves against receivables were about 20%. In Q1, they were close to 30%. In Q2, they were 40% of gross receivables.
Product sales mix for Q3:
15% PC
24% PSX
49% N64
12% GB
Bill-
Assuming I'm correct that THQI will reach pre-split levels of $55 by year-end, I think a 3:2 split allows THQ to announce another 3:2 split in conjunction with their full year 1998 results in 2/99. By using 3:2 splits, rather than 2:1 splits, the company is able to increase the frequency of splits, which should be good psychologically. That's my guess.
Todd |
