Tencent's financial results disappoint

Tencent yesterday reported less-than-expected profit and revenue in the second quarter as the pace of growth in online gaming income slowed.

Revenue in the three months ended June 30 rose 30 percent to 73.7 billion yuan (US$10.6 billion), but missed a 77.3 billion yuan expectations by analysts. 

According to US accounting rules, net profit fell 2 percent from a year ago to 17.9 billion yuan versus 19.6 billion yuan expected, and profit under non-GAAP rules rose 20 percent to 19.7 billion yuan.

Revenue from PC games dropped 5 percent annually and smartphone gaming revenue grew 19 percent from a year ago to 17.6 billion yuan but declined 19 percent sequentially.

Its gaming title, Monster Hunter: World, was pulled off earlier this month for failing to receive approval from the General Administration of Press and Publication Administration and it’s still waiting for the green light from the gaming watchdog to relaunch the game. 

China’s biggest social networking and gaming company said it’s seeking to reinvigorate mobile game revenue growth, via deepening engagement with existing titles and potential international monetization opportunities. The number of users for its popular messenger-to-payment app WeChat added 9.9 percent to 1.06 billion.

Tencent shares fell over 3 percent yesterday ahead of the earnings release as investors worried about slowing online gaming income.

As high as US$150 billion have been wiped out of Tencent’s market valuation since the beginning of this year.