Changyou.com Limited Fourth Quarter Earnings Sneak Peek

Changyou.com Limited(ADR) (NASDAQ:CYOU) will unveil its latest earnings tomorrow, Monday, February 4, 2013. Changyou.com is an online game developer and operator in China.

Changyou.com Limited(ADR) Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $1.31 per share, no change from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from $1.30. Between one and three months ago, the average estimate moved up. It has been unchanged at $1.31 during the last month. For the year, analysts are projecting net income of $5.21 per share, a rise of 10.6% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 9 cents, reporting profit of $1.41 per share against a mean estimate of net income of $1.32 per share.

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A Look Back: In the third quarter, profit rose 38.1% to $72.9 million ($2.74 a share) from $52.8 million ($1.98 a share) the year earlier, exceeding analyst expectations. Revenue rose 39.3% to $165.8 million from $119 million.

Here’s how Changyou.com Limited traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

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Wall St. Revenue Expectations: On average, analysts predict $168.8 million in revenue this quarter, a rise of 22.7% from the year-ago quarter. Analysts are forecasting total revenue of $618.7 million for the year, a rise of 27.7% from last year’s revenue of $484.6 million.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.66 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 2.97 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 77.8% to $305.6 million while assets decreased 0.4% to $507.7 million.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 49.7% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 23.5% in the first quarter and 27.4% in the second quarter before increasing again in the third quarter.

Analyst Ratings: With seven analysts rating the stock a buy, none rating it a sell and one rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)