News Column

King Digital Beats in Q1

May 7, 2014

The Associated Press

Game maker King Digital Entertainment PLC reported a sharp jump in its first-quarter revenue and profit on the success of its new mobile game "Farm Heroes Saga." The results topped market expectations but its shares plunged on concerns that the popularity of some of its games may be waning.

It was the company's first earnings report as a public company since the "Candy Crush Saga" maker's lackluster debut in March.

King Digital said Wednesday that it earned $127.2 million, or 41 cents per share, for the quarter that ended March 31. That's up from $52.7 million, or 16 cents per share, a year ago. On an adjusted basis, it earned 61 cents per share.

Its revenue nearly tripled to $606.7 million from $205.9 million, due in large part to the success of its mobile "Farm Heroes Saga" product in January.

Analysts polled by FactSet were anticipating earnings of 59 cents per share on an adjusted basis with revenue of $601.6 million.

The success of the new game helped offset some slowing demand for its most well-known game, Candy Crush.

King Digital said that gross bookings, which are a key measure of revenue for gaming companies, nearly tripled from last year. But that measure was up only 1 percent from the fourth quarter, hinting that its popularity gains may be waning. And it's most well-known game, Candy Crush Saga, accounted for 67 percent of its first quarter gross bookings, down from 78 percent in the fourth quarter.

The company has been trying to prove that it is more than a one-hit wonder, highlighting that three of its games were top 10 grossing games on the Apple App Store and Google Play Store in the United States, and worldwide on Facebook for the quarter. The company offered more than 180 games to its 352 million users as of the first quarter.

Still shares fell $2.13, a nearly 11.4 percent decline, to $16.63 by midday Wednesday. King Digital's shares priced at $22.50 for its IPO.


Original headline: King Digital beats in 1Q but shares plunge

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Source: Associated Press

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