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

To: StaggerLee who wrote (3997)	3/13/1998 2:09:00 AM
From: Trippi	Read Replies (4) \| Respond to of 14266

Tom C. WRONG What part of this do you not get. Earnings for WCW related product is projected to be 29% of THQ earnings in 1998 down from 39% in 1997. Stu Halpin had the following earnings percentages for WCW related earnings BEFORE the loss of the license 1997 39% 1998 25% 1999 15% all while estimating 35% overall growth and a price target pre license loss and reinterated after the WCW license loss of $38. You said "One year from now THQ will loss 40% of its earnings" this is total crap. This quarter we had reorders for NWO and the release of Nitro -- a year from now we will have reorders from WCW Thunder, Rugrats and the release of both (oh yeah I forgot they are one shot deals -- so I guess we don't get the earnings) of both ERTS64 ports. On the one hand you argue that WCW license loss is deadly because the games generate so much money -- and then you discount the earnings we will still be making from those games. The fact is that a year from now THQ can run up earnings by saturating the market with its final WCW offerings alone. You can argue (as I have) that those earnings should not or will not be rewarded a multiple PE because they are one shot deals. But you can not argue that we will lose 40% of our earnings. There is no one -- not even the analyists that downgraded us -- who isn't holding to a price target above $30 for fy98. In fact even the downgrade artists have a target of $34 by years end -- that's right $34 after they downgraded. Oh and BTW you might wait about 3 weeks when we will show 1 year trailing earnings of at least $1.63 totally blowing away by just the 1st quarter the analyists estimates of $1.35 for the whole year. We will end up easily at $1.80 in earnings by years end. You say WCW doesn't count anymore -- congrats -- I think the same thing. So you run the numbers: 2x WCW earnings of .52 = $1.04 25x nonWCW earnings of $1.28 = $32 Total fy98 target = $33 Screw it lets knock it down to zero times WCW earnings -- WOW what a terrible hit we take -- we are down to $32. So here we sit at $21 and change. Two analyists that have for umpteen quarters always undershot the company's earnings have a target of $38 and $34. Our own math throwing every penny of WCW revenue out the window applies a target of $32. All this based on $1.80 earnings for a year in which at the end of the 1st quarter we will already have trailing earnings of $1.63. $1.80 by year end is probably still to low $2 wouldn't surprise those of us who know this company.. Geez in that case even with a lowly PE of 16 (currently we are at 15.7) we get a target of $32. Pick one $38, $34, $32 any of them are 50% on your money at $21 bucks today -- and Todd and others will make better cases than I can for why all three of the above numbers are too low. You clearly do not know Farrell he is annoyingly conservative. He isn't the kind of CEO who just runs out and says "this is our best year ever and we are going to beat it in 1998 by 35%". You can run around and scream the sky is falling all you want -- go read the posts after the secondary -- I and others were there listening to the same garbage about how THQ was finished and the stock was a dog. I bought more then and I will buy more now. Big bad ERTS didn't want WCW when it could be had for $1million -- and we will milk it for all its worth before they get their grubby hands on it for 10 times what we paid and they won't make 1/2 what THQ made off of it. The great thing about all these arguments is we can all come back at the end of the year to see who's right. Mark it on your calendar -- no way we drop a single point in earnings a year from now -- and no way we haven't seen well over $30 by then. And trust me I'll be here to eat my words if I'm wrong -- will you? Trippi