Perfect World Earnings - Mostly Inline
Should be an interesting reaction to
Perfect World (PWRD) earnings today - last time around they beat estimates by 3 cents, but gave very light guidance (
May 19: Perfect World - Good Earnings, Light Guidance; Buying the Dip) that they quickly upped within a month when the stock was hammered (
Jun 13: Perfect World up 13% in Early Trading on Raised Guidance). This time around - in line earnings and in line to slightly upward guidance - with such a depressed valuation; the stock is trading nearly 25% lower than where it was ahead of last quarter's earnings report - it will be interesting to see how the market handles the stock. As they had warned the earthquake and aftermath did effect results, but still tremendous year over year growth and solid sequential growth.
- Total revenues were RMB334.4 million (USD48.8 million) in 2Q08, an increase of 10.3%, or RMB31.3 million, from RMB303.2 million in 1Q08 and an increase of 157.8%, or RMB204.7 million, from RMB129.7 million in 2Q07.
- The sequential increase in online game operation revenues was primarily attributable to a full quarter of revenue contribution from Chi Bi, the successful launch of expansion packs for some of the Company's existing MMORPGs and the positive market response from recent marketing campaigns.
- In addition, as the user base of the Company's games keep expanding while the accumulated number of inactive accounts has also continued to grow, in 2Q08 we began to enforce our rights to close a player's game account that has been inactive for 360 consecutive days. Revenues recognized from the inactive accounts were approximately RMB8.4 million in 2Q08. The Company will continue to implement this policy and recognize revenues from inactive accounts on a quarterly basis.
- The ACU (Average Concurrent Users) was approximately 619,000 in 2Q08, as compared to 660,000 in 1Q08 and 446,000 in 2Q07.
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