What You Need to Know From Shanda's Q4 and 2012 Earnings

Shares of Shanda Games  (NASDAQ: GAME  ) remained relatively stable after the company reported revenues and earnings just shy of analysts estimates yesterday. Analysts estimated $0.14 for the fourth quarter and $0.67 for 2012, while Shanda produced $0.12 for the quarter and $0.64 for the year.

In the fourth quarter, revenues were $172.1 million (RMB 1,081.7 million), down 20% year over year. Revenues outside of China drove the company's growth, with revenues up 12% year over year to $16.8 million (RMB 105.5 million). Net income came in at $34.1 million ( RMB 214.3 million), down 29.6% year over year. Revenues also on a fiscal-year basis. Dropping 11.4%, Shanda brought in $744.9 million (RMB 4,682.1 million) in 2011. Net income also decreased 12% year over year to $177.2 million (RMB 1,113.4 million).

Despite negative net profit quarter over quarter, Shanda has seen strong revenue growth. Thanks to solid performance of "Dragon Nest" in overseas markets and and mobile game "Million Arthur" in Korea, revenues rose 61.3% from Q3 2012 to Q4 2012.

Perhaps stabilizing Shanda's stock price is CEO Xiangdong Zhang words on new games releases:

Our upcoming title, Rift, has ranked among the top five most anticipated games on several major Chinese game portals, which reinforces our belief in the game's future potential once it starts the open-beta test next month.  In addition, AION 4.0 expansion pack, World ZeroFinal Fantasy XIV and Dungeon Striker are all on track and progressing through the various stages of development.  We look forward to the launch of these games as we believe they will help us expand our user base and diversify revenue streams.


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