Tencent reported first quarter earnings on Wednesday that beat market expectations, fueled by its booming gaming business.
Shares in Asia's second-most valuable public company were under pressure coming into the earnings report, with investors fearing potentially lower margins and increasing costs.
But the Chinese technology giant dispelled those fears. Here's how it did:
- Revenues totaled 73.53 billion yuan ($11.5 billion) versus a Thomson Reuters estimate of 71.04 billion yuan. Revenues were up 48 percent year-on-year.
- Net profit came in at 23.29 billion yuan versus an estimate of 17.5 billion yuan. That represented a 61 percent year-on-year rise.
- Operating margin rose to 42 percent from 39 percent in the first quarter of last year.
Tencent has a number of different business areas, including advertising and gaming, and is the owner of China's largest messaging app, WeChat.
The gaming business boosted Tencent's revenues in the quarter. Smartphone games revenues alone were up 68 percent year-on-year to 21.7 billion yuan, thanks to titles such as "Honour of Kings." Tencent said that there was "double digit growth" in terms of daily active users for the game.