PEKING (dpa-AFX) - Chinese online-games provider Shanda Games Ltd. (GAME) reported late Wednesday a profit for the first quarter that declined from last year, reflecting a drop in revenues and lower operating margins amid higher expenses. Both adjusted earnings per share and quarterly revenues also came in below analysts' expectations.
'During the first quarter of 2013, we made significant progress in our mobile game business as we witnessed strong reception to our mobile games in the Korean market. With revenue contribution close to 10 percent of our total revenues, our mobile game business now forms an integral part of our strategic focus,' CEO Xiangdong Zhang said in a statement.
The Shanghai, China-based company reported net income of RMB 244.9 million or $39.1 million for the first quarter, up from RMB 336.8 million in the prior-year quarter. Earnings per ADS decreased to RMB 0.90 or $0.14 from RMB 1.20 in the year-ago quarter. Earnings per share was RMB 0.45 or $0.07, down from RMB 0.60 last year.
Excluding the items, adjusted net income for the quarter was RMB 275.2 million or $43.9 million, compared to RMB 381.8 million in the same quarter last year. Adjusted earnings per ADS was RMB 1.02 or $0.16, compared to RMB 1.36 a year-ago. Earnings per share was RMB 0.51 or $0.08, compared to RMB 0.68 last year.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the quarter. Analysts estimates typically exclude special items.
Total net revenues for the quarter decreased 21.9 percent to RMB 1.08 billion or $173.0 million from RMB 1.39 billion in the same quarter last year. Seven Wall Street analysts had a consensus revenue estimate of $173.72 million for the quarter.
On segment basis, net revenues from the company's major revenue contributor, massively multi-player online or MMO, games for the quarter declined 28.3 percent to RMB 976.4 million or $155.8 million from RMB 1.36 billion in the prior-year quarter.
Other revenues were sharply down 94.0 percent to RMB 1.7 million or $0.2 million from RMB 28.3 million in the year-ago quarter. Mobile game revenues totaled RMB 106.5 million or $17.0 million. The company began reporting mobile game revenues separately from the first quarter of 2013.
Operating margin contracted 400 basis points to 27.4 percent from last year's 31.4 percent as operation expenses, as a percentage of total revenues, increased 540 basis points, partially offset by gross margin improvement of 140 basis points from last year.
The company said it successfully launched the mobile game 'Million Arthur' in Korea, and in Taiwan in late March in both the Android and iOS platforms. It plans to launch the game in Mainland China and Singapore this summer.
The company said it continues to work on developing a number of other titles, including a mobile version of 'Dragon Nest,' which will be launched during the second half of this year.
'We have begun 2013 on sound footing. 'Million Arthur's stellar performance makes it an anchor for our mobile game business and overseas development, while we will continue to devote resources towards enhancing our MMO game portfolio,' Zhang added.
Shanda Games was spun-off from interactive entertainment media company Shanda Interactive Entertainment Ltd. (SNDA) through a initial public offering, which was the first U.S.-listed IPO to raise more than $1 billion in 2009. Following the offering, Shanda Interactive holds 71 percent of Shanda Games' outstanding equity, and 96 percent of its voting rights.
GAME closed Wednesday's regular trading at 3.11, down $0.01 or 0.32% on a volume of 0.51 million shares.
Copyright RTT News/dpa-AFX
© 2013 AFX News
