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What:Shares of Changyou.com Ltd were down 10.5% as of noon Monday after the Chinese online game specialist announced mixed fourth-quarter results.
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So what:Quarterly revenue jumped 19% year over year to $215.9 million -- notably including 7% growth in online game revenue to $184.4 million, and 8% growth in advertising revenue to $18.3 million -- which translated to adjusted net income of $0.25 per diluted American depositary share. Analysts, on average, were expecting slightly higher earnings of $0.29 per share on lower revenue of $210.9 million.
"I am pleased to report a quarter of solid performance," said Changyou co-CEO Carol Yu, "as demonstrated by a sustainable revenue stream from TLBB PC, a successful launch of the mobile game TLBB 3D, as well as a more cost conscious approach to our mobile Internet business."
Now what: For the current quarter, however, Changyou expects revenue between $195 million and $200 million, or below Wall Street's models for first-quarter sales of $200.1 million.
All things considered, Changyou's misses weren't that significant relative to expectations. But given its sluggish growth in the first place and with shares trading at 48 times trailing-12-month earnings, I can't blame investors for taking a step back today.
The article Why Changyou.com Ltd (ADR) Stock Sank Monday originally appeared on Fool.com.
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