THQ Files Restated Results

The video game maker revises its earnings downward to adjust for options grant problems it announced earlier this month.
Stephen TaubJanuary 22, 2007

THQ Inc. restated its results going back to 2004. The video game maker, which earlier this month said an independent investigation of its historical stock-option grant practices found no evidence of fraud or misconduct, is one of at least 198 companies that have launched internal probes, or are being investigated by federal regulators for possibly backdating stock option grants, according to the Associated Press.

THQ revised downward its fiscal 2004 earnings, to $34.1 million from a previously reported $35.8 million. For 2005, the company lowered earnings to $61.4 million from $62.8 million. For fiscal 2006, it reduced income to $32.1 million from $34.3 million.

THQ also cut net income for the second quarter ending September 30, to $11.6 million from $12.6 million. The company also revised its second-quarter loss in 2005 to $1.9 million from its previously reported loss of $1.4 million.

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Earlier this month, THQ explained in a statement that a special committee created to investigate the company’s options practices identified instances in which documentation of certain grants was lacking. The committee also determined that the company misapplied generally accepted accounting principles by using incorrect measurement dates for financial accounting and reporting purposes on a number of occasions. THQ also noted that the special committee recommended certain corrective measures to improve procedures for granting and administering stock options, which the board of directors adopted and the company is implementing.