(Adds information on Shanda Interactive results)
DOW JONES NEWSWIRES
Shanda Games Ltd. (GAME) posted a 39% rise in earnings as the
Chinese online-game developer continued to add paying
subscribers.
The company, which was spun off Sept. 25 from Shanda Interactive
Entertainment Ltd. (SNDA), focuses on massive role-playing games, a
sector that is monitored by a government anxious keep a tight rein
on the culture even as it loosens economic controls. Online gaming
companies have also been under pressure to strip any "lottery-like"
features.
Earnings were CNY366.6 million, or CNY1.32 (20 U.S. cents) per
American depositary share, up from CNY264.6 million, or CNY0.96 per
ADS, a year earlier. Excluding share-based compensation, earnings
were CNY1.58 (24 cents) per ADS, up from CNY0.98.
Net revenue rose 45% to CNY1.27 billion ($186.3 million).
Analysts polled by Thomson Reuters expected earnings of 21 cents
a share on revenue of $186 million.
Revenue from massively multiplaying online role-playing games
was CNY1.18 billion ($172.9 million), up 53% from a year earlier
and 9% from the second quarter. Average monthly revenue per account
rose 4% to CNY43.4 from the second quarter, while active paying
accounts rose 6% sequentially to 9.06 million.
At casual games--card games and the like--revenue was CNY87.4
million ($12.8 million), down 11% from a year earlier but up 21%
quarter-on-quarter. Average monthly revenue per account rose 15% to
CNY24.1 from the second quarter, as active paying accounts rose 5%
to 1.21 million.
Separately, Shanda Interactive, which owns 78% of the games
unit's shares and 97% of its voting rights, said its third-quarter
profit grew 29% to CNY453.3 million (US$63.7 million), or CNY6.18
(90 U.S. cents) per ADS, from CNY337.1 million, or CNY4.62 per ADS,
a year earlier. Excluding items, earnings were CNY7.40 (US$1.08)
per ADS, up from CNY4.78 a year earlier.
Revenue climbed 48% to CNY1.38 billion (US$202.5 million). The
total grew 12% from the second quarter, above the company's
guidance of 8% to 11% sequential growth.
Analysts estimated earnings of 88 cents per ADS on revenue of
$199 million.
Gross margin fell to 71.1% from 73%.
Shanda Interactive also said it hired Jing Zhu from Yahoo Inc.
(YHOO) to be chief technology officer of its Shanda Online Holdings
Ltd. unit. Zhu led Yahoo's development of contextual ad-matching
technology.
Shanda Games' ADSs were up 1.2% to $10.74 in after-hours
trading, while parent Shanda Interactive's ADSs rose 1.3% to
$53.79. The games unit's shares have disappointed high expectations
by falling about 11% since their IPO, but the parent's ADSs are up
more than double in the past year.
-By Jay Miller and Kathy Shwiff, Dow Jones Newswires;
212-416-2355; jay.miller@dowjones.com