Changyou.com Limited Earnings Cheat Sheet: Profits Grow by Double Digits For Fifth Straight Quarter

Changyou.com Limited (NASDAQ:CYOU) reported higher profit for the third quarter as revenue showed growth. Changyou.com is an online game developer and operator in China.

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Changyou.com Earnings Cheat Sheet for the Third Quarter

Results: Net income for the multimedia and graphics software company rose to $52.8 million (99 cents per share) vs. $45.3 million (85 cents per share) in the same quarter a year earlier. This marks a rise of 16.6% from the year earlier quarter.

Revenue: Rose 39% to $119 million from the year earlier quarter.

Actual vs. Wall St. Expectations: CYOU reported adjusted net income of $1.01 per share. By that measure, the company beat the mean estimate of 98 cents per share. Analysts were expecting revenue of $117.5 million.

Quoting Management: Mr. Tao Wang, Changyou’s Chief Executive Officer, commented, “Our blockbuster Tian Long Ba Bu, or TLBB, continues to expand player numbers with the release of each new expansion pack that adds sought-after new game play that is requested by our players. After the release of the major expansion pack TLBB3 on October 20th, the number of users and the number of active paying accounts increased. Meanwhile, our new self-developed 3D MMO game, Duke of Mount Deer, or DMD, which launched on July 22nd, appeals to hard-core game players with its new technologies and advanced cross-server game play. We believe these results once again demonstrate our ability to understand and fulfill gamers’ needs and showcase our content development and game operation strengths. We anticipate bringing a greater variety of games to market in the following quarter and next year to further advance our leading position in the online game industry.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 32.7%, with the biggest boost coming in the most recent quarter when revenue rose 39% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 28.8% and in the first quarter, the figure rose 33.1%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 10 cents in the second quarter, by 7 cents in the first quarter, and by 4 cents in the fourth quarter of the last fiscal year.

Looking Forward: Expectations for the company’s next quarter results are lower than they have been. Over the past sixty days, the average estimate for fourth quarter has fallen from $1.14 per share to $1.10. Over the past three months, the average estimate for the fiscal year has climbed from $3.99 per to share to $4.11.

Competitors to Watch: The9 Limited (NASDAQ:NCTY), Shanda Games Limited (NASDAQ:GAME), Giant Interactive Group Inc (NYSE:GA), Perfect World Co., Ltd. (NASDAQ:PWRD), Shanda Interactive Entertainment Ltd ADR (NASDAQ:SNDA), NetEase.com, Inc. (NASDAQ:NTES), Webzen Inc. (WZENY), Gravity Co., LTD. (NASDAQ:GRVY), and Sohu.com Inc. (NASDAQ:SOHU).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)