Chinese online media company Shanda Interactive Entertainment Ltd. said Thursday its second-quarter net profit fell 60% from a year earlier due to higher expenses and a slight decline in revenue at its online games unit.
The company's games unit, Shanda Games Ltd., reported a 16% decline in second-quarter net profit because of decreased sales and margins, though the results were in line with analysts' expectations. The unit also said it plans to acquire Korean game developer Eyedentity Games Inc. and to form an online-game joint venture with China Network Television.
Shanda Games said given Eyedentity Games' portfolio of internationally licensed games, its planned acquisition of the company would support plans for global growth, and its said its joint venture with China Network Television would offer new game products and online video.
Sales in China's online game sector have slowed as the industry has matured, weighing on the results of both Shanda Interactive and Shanda Games. In response, Shanda Interactive has sought to diversify its business by boosting revenue from businesses such as online literature and videos.
Shanda Interactive's net profit for the three months ended June 30 was 168.8 million yuan ($24.8 million), down from 426.9 million yuan a year earlier. Its earnings per American Depositary Share fell to 2.76 yuan, from 6.14 yuan a year earlier, below the average 53 cents per ADS forecast by nine analysts in a Thomson Reuters poll.
The company's total operating expenses grew to 597.6 million yuan from 385.6 million yuan a year earlier because of higher costs for product development and sales and marketing.
Shanda Games reported a second-quarter net profit of 304.3 million yuan, down from 363.2 million yuan a year earlier. Analysts had forecast a net profit of 16 cents per ADS, according to a poll by Thomson Reuters.
The company's games unit, Shanda Games Ltd., reported a 16% decline in second-quarter net profit because of decreased sales and margins, though the results were in line with analysts' expectations. The unit also said it plans to acquire Korean game developer Eyedentity Games Inc. and to form an online-game joint venture with China Network Television.
Shanda Games said given Eyedentity Games' portfolio of internationally licensed games, its planned acquisition of the company would support plans for global growth, and its said its joint venture with China Network Television would offer new game products and online video.
Sales in China's online game sector have slowed as the industry has matured, weighing on the results of both Shanda Interactive and Shanda Games. In response, Shanda Interactive has sought to diversify its business by boosting revenue from businesses such as online literature and videos.
Shanda Interactive's net profit for the three months ended June 30 was 168.8 million yuan ($24.8 million), down from 426.9 million yuan a year earlier. Its earnings per American Depositary Share fell to 2.76 yuan, from 6.14 yuan a year earlier, below the average 53 cents per ADS forecast by nine analysts in a Thomson Reuters poll.
The company's total operating expenses grew to 597.6 million yuan from 385.6 million yuan a year earlier because of higher costs for product development and sales and marketing.
Shanda Games reported a second-quarter net profit of 304.3 million yuan, down from 363.2 million yuan a year earlier. Analysts had forecast a net profit of 16 cents per ADS, according to a poll by Thomson Reuters.
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