Chart: Tencent Hit by First Quarterly Profit Drop Since 2005
Chinese internet and entertainment giant Tencent Holdings Ltd. reported Wednesday that its second-quarter profit declined 2% to 17.9 billion yuan ($2.60 billion) from a year earlier, its first drop in quarterly profit in 13 years. Operating profit between April and June also fell 3% to 21.8 billion yuan.
Tencent shares dropped 3.61% on Wednesday before the company reported the worse-than-expected earnings. Shares of its major shareholder, Johannesburg-listed media company Naspers Ltd., dived as much as 10% on the figures’ release.
Tencent said the profit drop was “mainly due to lower net other gains generated from investment related items compared to the same period last year.”
The company’s revenue grew 30% to 73.7 billion yuan in the second quarter. Income from smartphone games, one of its main revenue channels, grew 19% year-on-year but fell 19% on a quarter-to-quarter basis to 17.6 billion yuan. It said that the decrease was “mainly due to non-monetization of popular tactical tournament games and timing of new game releases.”
The game publisher has abruptly pulled a popular Japanese-developed title from its platform just days after its release, as the industry struggles under a nearly half-year freeze on approval of all new games.
“We are seeking to reinvigorate our mobile game revenue growth, via initiatives including deepening engagement with our existing major titles, monetizing the proven popularity of tactical tournament games,” it said in the latest report.
The following is an updated table of Chinese company earnings between April and June, starting with the most recent to report.
An earlier version of this story misstated the year of Tencent’s last quarterly profit drop. It was 2005.
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