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

To: Apakhabar who wrote (13112)	2/9/2000 2:13:00 PM
From: Todd D. Wiener	Read Replies (4) \| Respond to of 14266

RE: THQI posting negative comps- I, too, find it amazing that THQ would give such guidance. Still, it's unlikely that MONT would say such things unless THQ suggested it. The only way I see that Q1 and Q2 would be lower than last year is if WM2K reorders in Q1 are low, Smackdown shipments in Q1 and Q2 are low (equal to or less than WM2K shipments), and selling, royalties and product development expenses are high. I agree that the expenses will be higher than last year on a % basis, due to increased TV ads and R&D from Genetic Anomalies. But if Smackdown is a runaway success (i.e., best-selling title ever for THQ), and if WM2K continues to sell through at a high rate, I would be surprised to see negative comparative EPS. The conference call is going to set the tone for the stock's near-term performance. Todd

To: Apakhabar who wrote (13112)	2/10/2000 3:53:00 AM
From: Marc Newman	Respond to of 14266

Thanks for calling the company. Interesting that Garrett said there was no guidance given to Smackdown shipment when our short friends seemed to indicate that THQ planned to ship 500,000. I find Q2 guidance especially bizarre. This I highly disagree with: <<THQ's fourth quarter doesn't look like the stunning quarter that will rescue the year. THQ is slated to release a WWF title and Rugrats title in 4Q00. As mentioned in previous notes, wrestling and Rugrats are both showing declining comps and are expected to continue doing so in the future.>> I just don't see that whatsoever. First of all, THQ is releasing four WWF titles in Q4 if I'm not mistaken. Not to mention three Rugrats games. Not to mention a Rugrats movie. There are such obvious reasons why wrestling and Rugrats were down in Q4 1999, including undershipment of WM2K, that I can't see why any "negative" analyst can't see that. THQ has never had a wrestling PSX title launched in the holiday season before. It has never had a Rugrats N64 game launched in the holiday season. When there was a Rugrats movie in conjunction with a game release, the game sold and sold and sold. I expect something similar. The negative comment about GBC seems odd too. Do they really think Pokemon will be 75% of the GBC market again in 2000? Come on. Now maybe this is just a one-off event, some bizarre contrivance to escape a very onerous Q1 comparison and start maximizing earnings instead of the forced quarter-on-quarter thing. An obvious downfall to the prior strategy was releasing Road Rash and Nuclear Strike right after Dreamcast debut and watching "B" Nintendo titles do poorly when these games would have sold far better if released much earlier. THQ had those licenses for a long time. And I have serious reservations about the way this changing of estimates was handled. Not too happy with some of the semantics from early January press releases either. Nonetheless, the stock is damn cheap. If they start beating estimates again they could have some fine momentum for 2001 when the industry starts to really head to greener pastures. Hell, if they do $2 in eps we will see an easy double from here. It's the waiting eight months for the good quarters that may turn into a grind. Sigmund was joking, but his comment about a higher PE is kind of relevant. Even if THQ only did $1.25 this year I'd expect the stock to be seeing a 20 PE at some point. That's just how it seems to work with the companies that struggle. Marc