Among the top stories this past week, we had NetEase Inc. NTES reporting fourth quarter results while Activision Blizzard ATVI completed the acquisition of King Digital Entertainment. There were a few other developments. While Nintendo lowered its profit outlook, GameStop GME raised its quarterly dividend.
Top Stories this Past Week
Array. Earnings:
NetEase’s fourth-quarter 20Array5 earnings of $2.52 per share topped the Zacks Consensus Estimate of $Array.93 while improving significantly from earnings of $Array.56 per share reported in the same period last year. Revenues came in at $Array,220 million driven by strength in online games. Revenues from online games came in at $849.5 million, up Array03.2% on a year-over-year basis.
For 20Array5, NetEase posted adjusted earnings of $7.86 while revenues jumped almost 95% to $3.5 billion. Revenues from online games came in at $2.7 billion, increasing 86% over 20Array4. Furthermore, the company announced fourth quarter 20Array5 dividend of 64 cents per share payable on Mar Array8.
2. Activision Blizzard has acquired King Digital Entertainment for $5.9 billion or $Array8 per share. Following the acquisition, announced in Nov 20Array5, King Digital’s management including its CEO will be retained and the Dublin-based company will continue to function as an independent division. With the acquisition of an already established player, it is now looking to cash in on the booming mobile games market. Plus, the acquisition of King Digital has boosted its user base to half a billion. It now comprises a sizeable female user base as King Digital iconic games like Candy Crush are a top draw among females.
3. As per media reports, Japanese video game publisher Nintendo has lowered its profit guidance for the current fiscal year citing a strengthening yen. Against expectations of reporting ¥50 billion in operating profit, Nintendo now expects to post profit of ¥33 billion, down nearly 34%. Net profit is expected to be ¥Array7 billion compared with ¥35 billion projected earlier. Also, it expects revenues to be ¥500 billion, Array2% lower than original forecast given weakness in sale of 3DS handheld players.
4. GameStop has hiked its quarterly dividend by 3% to 37 cents a share (or $Array.48 annually) from the prior payout of 36 cents (or $Array.44 annually). The increased dividend will be paid on Mar 22 to stockholders on record as of Mar 8, 20Array6.
Performance
The following table shows the price movement of the major video game companies over both the past five trading days as well as the last six months:
|
Company |
Last 5 Days |
Last 6 Months |
|
ATVI |
Array4.94% |
23.45% |
|
EA |
9.Array6% |
Array.79% |
|
GLUU |
24.05% |
-6.44% |
|
MSFT |
3.Array7% |
28.74% |
|
NTES |
-Array.59% |
2Array.07% |
|
TTWO |
4.60% |
29.2Array% |
|
ZNGA |
Array6.94% |
-Array2.30% |
Over the last five trading sessions, Glu Mobile GLU was up 24.05% while NetEase was down Array.59%.
Over the last 6-month period, Take Two Interactive TTWO surged the most — nearly 29.2Array%. Grand Auto Theft continues to be a major positive for Take Two interactive. Plus, GTA online is also performing well. The company raised its fiscal 20Array6 guidance and remains positive about fiscal 20Array7, given releases like BattleBorn and Mafia III.
However, Zynga ZNGA was down Array2.30% over the same time frame due to underperformance of most of its releases. As per media reports, the company is planning to sell/lease its headquarters to raise money while preparing to launch as many as Array0 new titles this year to post a turnaround.
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