THQ Slides; Cowen Downgrades, Sees Weak uDraw Sales

Orlando, FL 12/6/11 (StreetBeat) --Shares of video game publisher THQ (Nasdaq:THQI) are trading lower Tuesday morning after Cowen analyst Doug Creutz cut his rating on the stock to Neutral from Outperform, asserting that the company appears likely to miss its December quarter financial guidance.

“We now believe that THQ will miss December quarter guidance as a result of likely underperformance by ‘uDraw‘. Demand for the title has appeared to be very weak and it is now being discounted by $20 at all major online retailers,” he notes in a research report. “In contrast to last year when the title was consistently in the top 20 on Amazon.com throughout the holiday season at full price, this year the title failed to crack the top 100 until the recent price cut. We think THQ will likely be on the hook for significant price protection as a result of the weak sell-through.”

For the March 2012 fiscal year, Creutz now expects a loss of 47 cents a share; his previous forecast was a loss of 23 cents. For FY 2013, his forecast is now for a profit of 5 cents a share, down from a previous forecast of 49 cents.

THQI this morning is down 20 cents, or 11%, to $1.62.

StreetBeat Disclaimer

Distributed by Viestly