PEKING (dpa-AFX) - Chinese online-games provider Shanda Games Ltd. (GAME) reported late Sunday a profit for the second quarter that edged up from last year, despite a revenue decline, helped by improved margins amid lower expenses. Both adjusted earnings per share and quarterly revenues came in below analysts' expectations.
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.
Separately, Shanda Games said Chairman and CEO Qunzhao Tan has resigned from the positions, while remaining a member of the company's Board, citing the company's poor in the recent quarters and health issues. Tan took over the additional role of CEO after the resignation of Diana Li in January 2010.
The company has promoted COO Xiangdong Zhang to succeed Tan as CEO, while Director Tianqiao Chen was appointed as chairman.
'On behalf of the entire board, I would like to thank Qunzhao for his tremendous contributions to Shanda Games over the years. He played a pivotal role in nurturing our online games business from infancy into an industry leader,' Chen said in a statement.
The Shanghai, China-based company reported net income of RMB 308.4 million or $48.8 million for the second quarter, up from RMB 305.2 million in the prior-year quarter. Earnings per ADS increased to RMB 1.10 or $0.17 from RMB 1.08 in the year-ago quarter. Earnings per share was RMB 0.55 or $0.09, up from RMB 0.54 last year.
Excluding the items, adjusted net income for the quarter decreased to RMB 336.8 million or $53.2 million from RMB 370.3 million in the same quarter last year. Adjusted earnings per ADS declined to RMB 1.20 or $0.19 from RMB 1.30 a year-ago. Earnings per share was RMB 0.60 or $0.10, down from RMB 0.65 last year.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.17 per share for the second quarter. Analysts estimates typically exclude special items.
Total net revenues for the quarter decreased 14.4 percent to RMB 1.13 billion or $178.7 million from RMB 1.32 billion in the same quarter last year. Eight Wall Street analysts had a consensus revenue estimate of $182.72 million for the quarter.
On segment basis, net revenues from the company's major revenue contributor, multi-player online role-playing games or MMORPGs, for the quarter declined 16.6 percent to RMB 1.04 billion or $164.5 million from RMB 1.25 billion in the prior-year quarter.
However, other revenues were up 23.3 percent to RMB 90.1 million or $14.2 million from RMB 73.1 million in the year-ago quarter.
Operating margin expander 400 basis points to 31.4 percent from last year's 27.4 percent as gross margin improved 180 basis points and operation expenses, as a percentage of total revenues, decreased 230 basis points from last year.
GAME closed Friday's regular trading at 3.33, down $0.05 or 1.48% on a volume of 1.59 million shares.
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© 2012 AFX News
