December 6th, 2006 by Anonymous Blogger Posted in Companies & M&A | No Comments »
Arjan recently posted about the sale of the Minick shares by THQ to Swisscom. Reason for my to take a dive in the last financial numbers to see if it might shed some light on the sale. Looking at THQ’s Q2 financials, which where posted by THQ last month, the wireless division (still including Minick) has declined in total % vs. other gaming platforms. In Q2 2005, wireless revenue accounted for 6.3% of the sales while in Q2 2006, this number declined to 2.9%. This looks dramatic, but if we look at the total THQ net revenues in those periods, we can say THQ Wireless accounted for $ 8.989.596 in Q2 2005 and in Q2 2006 for $ 6.965.713 which means wireless revenues have shrunk. The complete of the company was 68% up while Wireless is 32,5% down. In an interview with MobileIndustry.biz, Wedbush Morgan analyst Michael Pachter tells us that the sale will have a small effect of just a few million which will hardly effect the company’s income statement. However a few million is a lot if you look at the wireless sales in percentages.
"Although we believe that this deal is relatively immaterial to THQ from a financial perspective and are not making a change to our estimates, we believe it signals a lessening commitment to the THQ Wireless business," Pachter continued. "The disposition of Minick could signal that growth in THQ’s wireless revenue will be even more tempered than previously announced, and there is some potential that wireless revenue will actually decline going forward."
That doesn’t sound like a bright future to me, however a THQ spokesman remains positive toward its mobile games division.
"THQ Wireless has a tremendous amount of wireless content, which we believe is critical to long-term success on the wireless platform," the spokesperson said. "Our wireless business has grown each year and we expect it to grow at a greater rate next year."
So why is THQ selling? The revenues don’t show a need to sell it
