PEKING (dpa-AFX) - Giant Interactive Group, Inc. (GA) Monday reported net income attributable to shareholders for the second quarter of RMB 10.2 million or $1.6 million, dropping 94.5 percent from RMB 186.0 million or $27.4 million in the year-ago quarter.
Earnings per American Depositary Share or ADS for the quarter were RMB 0.04 or $0.01, compared with RMB 0.79 or $0.12 last year.
The Shanghai, China-based company attributed the drop to increase in income tax expense, due to the one-time accrued withholding tax of RMB 259.6 million or $40.2 million, associated with the repatriation of cash for a special dividend intended to be paid during the third quarter 2011.
Non-GAAP net income for the quarter rose 42.2 percent to RMB 274.5 million or $42.5 million from RMB 193.1 million or $28.5 million in the year-ago quarter.
Non-GAAP earnings per ADS for the quarter were RMB 1.17 or $0.18, compared with RMB 0.82 or $0.12 in the year-ago quarter.
On average, 7 analysts polled by Thomson Reuters expected earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 35.6 percent to RMB 436.2 million or $67.5 million from RMB 321.7 million or $47.4 million in the year-ago quarter. Nine Street analysts had a consensus revenue estimate of $63.8 million for the quarter.
Total operating expenses for the quarter increased 24.1 percent from last year.
Research and product development expenses for the quarter increased 79.4 percent to RMB 59.4 million or $9.2 million due to the increase in staff headcount and compensation increase over the past year. Sales and marketing expenses were down 11.7 percent year-over-year.
Non-GAAP margin for the quarter improved to 62.9 percent from 60.0 percent last year.
Active Paying Accounts for online games increased 39.0 percent for the quarter. Average Revenue Per User or ARPU for online games decreased 5.0 percent for the quarter to RMB 212.0.
The company announced a special cash dividend of $3.00 per share, payable to shareholders of record on August 31, 2011, and is expected to be paid on September 9, 2011.
The total amount of cash distributed in the special dividend is expected to be approximately $708.2 million net of one-time accrued withholding tax associated with the repatriation of cash for this special dividend intended to be paid, but may be subject to offshore withholding/income taxes and handling charges.
Yuzhu Shi, Giant's Chairman and Chief Executive Officer, said,' Despite a highly competitive landscape, we are optimistic the growing popularity of ZT Online 2 and the ongoing strong performance of our ZT Online Series will nevertheless enable us to deliver sequential top-line growth next quarter.'
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