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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: Andrew C.R. Biddle who wrote (11636)	9/20/1999 3:00:00 PM
From: Todd D. Wiener	Respond to of 14266

"Why are Acclaim's and THQ's efficiencies in COGS, R&D and selling expenses over EA not fully reflected in their bottom line? " The answer is quite obvious, no? The missing lines in Concordia's P&L analysis are royalties and G&A. THQ's royalties are typically 15-20% and G&A is typically 4-6%. AKLM's G&A is 15% and ERTS' G&A is 7-8%. THQI is one of the only companies to separate royalties from COGS, so THQI's COGS is artificially low. Still, adding THQI's royalties to its COGS gives it a number similar to others in the industry (slightly better at 65-70% of sales). With SG&A at 15% (the best in the industry), THQI's operating margins can be 15+%, which is the best in the industry. The question is not "Why aren't these efficiencies fully reflected in the bottom line?" Rather, it is "Why is THQI's bottom line not fully reflected in its stock price?" I suppose the market is coming to terms with the answer right now. Hey Stagger -- Still alive???? Todd