Changyou.com Limited Earnings: Everything You Must Know Now

Changyou.com Limited (NASDAQ:CYOU) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Changyou.com Limited Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 9.3% to $1.41 in the quarter versus EPS of $1.29 in the year-earlier quarter.

Revenue: Rose 23.8% to $182.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Changyou.com Limited reported adjusted EPS income of $1.41 per share. By that measure, the company beat the mean analyst estimate of $1.37. It missed the average revenue estimate of $183.35 million.

Quoting Management: Mr. Tao Wang, Changyou’s Chief Executive Officer, commented, “Our philosophy is based on giving gamers what they want, when they want it and where they want it. Today, that means creating products and services for the rapidly expanding market of mobile and Web games, while building on our success in the PC-rooted world of massively multiplayer online games (“MMO games”). TLBB remains one of the drivers for growth and our latest self-developed MMO game, Dou Pou Cang Qiong, added to our top-line results in the second quarter, while the performance of our two flagship Web games, DDTank and Wartune, was solid. With 7Road becoming a wholly-owned subsidiary of Changyou, we are refining our product strategy and product line-up for Web games. We also expect to launch a number of mobile games by the end of the year, roughly half of which will come from our own innovation lab. With an array of new games planned for the PC, Web and mobile and the capabilities we have built over the years in game development, operation, marketing and distribution, we believe we are positioned to succeed over the long-term.”

Key Stats (on next page)…

Revenue increased 2.71% from $177.59 million in the previous quarter. EPS decreased 2.76% from $1.45 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.49 to a profit $1.48. For the current year, the average estimate has moved down from a profit of $5.92 to a profit of $5.79 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)