King Digital Q3 profit drops but beats estimates

Source: King.com

Social and mobile game company King Digital Entertainment reported lower non-GAAP profit on Thursday as sales from its "Candy Crush Saga" title continued to shrink.

On a non-GAAP basis, it reported third-quarter adjusted income of 56 cents per share, which was less than 70 cents per share a year ago but more than analysts' estimate of 47 cents per share.

King shares were up 4 percent in after-hours trading after closing at $13.19 on the New York Stock Exchange. (Get the latest quote here.)

The company also announced a $150 million share repurchase program on Thursday.

A decline in sales of "Candy Crush Saga" in the latter half of the second quarter began to stabilize gradually toward the end of the third quarter, Chief Executive Riccardo Zacconi said in an interview.

King launched "Candy Crush Soda Saga," a sister title of its successful "Candy Crush Saga" franchise, on Facebook in October and is expected to release a mobile version of the game in coming weeks.

"With the launch of 'Candy Crush Soda' we will strengthen the 'Candy Crush Saga' franchise," Zacconi said.

The company, which went public in March, reported revenue of $514.4 million for the third quarter, down from $621.2 million in revenue a year ago. But the figure topped analysts' expectations of $495 million, according to Thomson Reuters I/B/E/S.

Non-'Candy Crush' titles

Investors are keeping a close eye on whether King can deliver a portfolio of consistent and long-lasting hits, apart from "Candy Crush Saga," to avoid the fate of "Farmville" maker Zynga Inc and "Angry Birds" developer Rovio Corp, which are struggling to make their game franchises grow.

Games other than its popular "Candy Crush Saga" title, such as "Diamond Digger Saga," released in September, accounted for 49 percent of third-quarter gross bookings of $544 million, the company said. This was up from the second quarter, when bookings from non-Candy Crush titles represented 41 percent of total bookings of $611.1 million.