King Digital Entertainment Plc’s (KING.N) shares fell as much as 14.3 percent in after-market trading on Thursday, after the “Candy Crush Saga” creator said it expects changes in foreign currency and a lack of new releases to hurt its gross bookings for the current quarter.
King, a maker of games for social media platforms and mobile devices, forecast second-quarter gross bookings of $490 million to $520 million, and said the mid-year period would be “seasonally softer”, although it expected to return to growth trends in the latter part of the year.[pro_ad_display_adzone id=”70560″]
The dollar .DXY has surged about 9 percent against a basket of major currencies in the first three months of the year.
The upcoming launches will stabilize and then reverse the bookings trend in the latter part of the year, Kurgan said on a conference call.
The weak forecast overshadowed the company’s strong first-quarter results.
King Digital, which went public in March last year, said net income rose to $164.1 million, or 51 cents per share, in the first quarter ended March 31, from $127.2 million, or 41 cents per share, a year earlier.
On an adjusted basis, the company earned 61 cents per share, well above the average analyst estimate of 53 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 6.1 percent to $569.5 million, but beat the average estimate of $563.4 million.
Total gross bookings, an indicator of future revenue, rose 3.1 percent to $604.5 million in the first quarter compared with the fourth quarter of 2014.
Analysts on average had expected bookings of $589.7 million, according to market research firm Factset StreetAccount.
Rival Zynga Inc (ZNGA.O) reported higher-than-expected bookings earlier this month, due to the popularity of titles such as “Words With Friends”.
King Digital records sales of virtual goods, such as coins, as deferred revenue, which is recognized as these goods are redeemed or used. Bookings equal revenue recognized in a period plus the change in deferred revenue.
The company’s shares were down 11.2 percent at $13.30 in extended trade.
(This story has been corrected in paragraph 13 to remove reference to “downloads”)
(Reporting by Subrat Patnaik and Arathy S Nair in Bengaluru; Editing by Simon Jennings)