Courtesy of Benzinga.
Changyou.com (NASDAQ: CYOU) reported a drop in its second-quarter net income.
Changyou’s net income attributable to the company dropped to $1.9 million in the quarter, versus $75.2 million in the year-ago quarter. Its earnings per ADS slipped to $0.04 compared to $1.41. Its adjusted attributable net income declined to $2.4 million, from $75.6 million. The company’s earnings per ADS dropped to $0.04, from $1.41 in the year-earlier period. Analysts were expecting a loss of $0.27 per share.
Its operating loss came in at US$7.0 million, versus a year-ago operating profit of US$93.3 million.
Its total revenue fell 3% to $177.8 million, versus estimates of $186.69 million. Online game revenues fell 9% y/y to US$153.9 million, while online advertising revenue surged 46% to US$14.7 million.
Changyou’s gross margin narrowed to 76% from 83% in 2013, while total operating expenses increased 143%.
Mr. Tao Wang, Changyou’s chief executive officer, said, “Changyou’s overarching strategy is to continue to launch new expansion packs and new games while supporting our emerging platform business. In the platform business, we are promoting and launching new content for 17173 media and mobile apps and investing in a mobile technology company. Ultimately, our goal is to combine our online games business with a central user platform for distributing and promoting games. We believe the two together will form a winning business model that can make Changyou into an even more valuable and successful company than it is today.”
Changyou projects Q3 adjusted attributable net loss of $0 million to $6.0 million. It expects adjusted loss per ADS of $0.00 to $0.11 per share on total revenue of $186.0 million to $192.0 million. However, analysts expected a loss of $0.04 per share on revenue of $200.06 million.
Changyou shares fell 2.84% to close at $23.95 on Friday.
