BEIJING (dpa-AFX) - Chinese online-games provider Shanda Games Ltd (GAME), Tuesday reported a decline in first-quarter profit, hurt by a near ten percent decline in revenue and weak operating margin.
The Shanghai-based company reported first-quarter net income of RMB 305.7 million or $49.7 million, compared with RMB 367.6 million in the prior year. Earnings per American Depositary Share, or ADS, dropped to RMB 1.12 or $0.18 from RMB 1.36 a year ago.
Excluding items, adjusted earnings for the quarter were RMB 334 million or $54 million, compared with RMB 397.9 million in the prior year. Adjusted earnings per ADS slid to RMB 1.24 or $0.20 from RMB 1.48 a year ago.
Revenues for the first quarter dropped 9.6 percent to RMB 992 million or $161 million from RMB 1.1 billion last year. Analysts polled by Thomson Reuters expected revenues of $188.3 million for the quarter.
Revenue from massively multi-player online, or MMO games fell 5.7 percent year-over-year, and revenue from mobile games plunged 38.4 percent.
Also impacting the results was operating margin that slid to 36.9 percent from 41.3 percent a year ago, while gross margin was up 360 basis points.
In January, Shanda Games received a $1.9 billion offer to be taken private by a consortium comprising its controlling shareholder Shanda Interactive Entertainment Ltd and an affiliate of investment firm Primavera Capital Ltd. Shanda Games is evaluating the proposal.
The consortium has proposed to acquire Shanda Games for $3.45 per class A or class B ordinary share, or $6.90 per ADS. Each ADS represents two class A ordinary shares. The consortium members already beneficially own about 76.2 percent of the company's outstanding shares.
Shanda Games stock closed Tuesday at $6.76 on the Nasdaq.
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