Changyou Announces Lower Revenue as Natural Decline Of Older Games; Stock Jumps
An online game subsidiary of Chinese internet company Sohu, Changyou.com Ltd. (Nasdaq: CYOU), posted its unaudited financial results for the first quarter ended March 31, sending its shares up more than 21 percent in New York to $19.57 on Monday.
The company said its revenue was $123 million in the third quarter, a decrease of 10 percent from the same period last year and an increase of 5 percent from the previous three months. Revenue from online games was $99 million, with the year-over-year decline attributed to the natural decline in revenue of the older games, though the company's popularity still exceeded the company's expectations.
The chief executive of Changyou, Dewen Chen, said, "During the quarter, TLBB PC performed better than our expectations, which demonstrates that players are happy with the current in-game environment and the long-term outlook for the game. Legacy TLBB Mobile also showed its resilience and did better than we expected due to new content and other improvements that we made to the game."
Changyou said the number of its mobile gamers' monthly active accounts remained flat year-over-year at 2.7 million. The number of PC users increased 13 percent to 900,000 compared with the same time last year.
Operating expenses decreased 18 percent from a year ago to $47 million, declining across all sectors, Changyou said.
The company posted income of $37 million, or 69 cents per share, for the three months in contrast to a loss of $13 million, or a 25 cent loss per share, a year ago.
Changyou, which operates multiplayer online games in China and provides ad services, was spun off from Sohu.com Ltd. (Nasdaq: SOHU) and became public in 2009. Changyou is a leading developer and operator of online games in China with a diverse portfolio of popular online games.
Looking forward, Changyou said it expects revenue in the range of $110 million to $120 million in the second quarter, with its online games revenue in the range of $90 million to $100 million.
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