The 10-second takeaway
For the quarter ended March 31 (Q1), Perfect World beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped significantly.
Margins dropped across the board.
Perfect World reported revenue of $100.6 million. The seven analysts polled by S&P Capital IQ looked for net sales of $98.8 million on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $114.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.49. The five earnings estimates compiled by S&P Capital IQ anticipated $0.47 per share. Non-GAAP EPS of $0.49 for Q1 were 36% lower than the prior-year quarter's $0.77 per share. GAAP EPS of $0.43 for Q1 were 39% lower than the prior-year quarter's $0.70 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 76.5%, 580 basis points worse than the prior-year quarter. Operating margin was 21.3%, much worse than the prior-year quarter. Net margin was 21.0%, 820 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $105.5 million. On the bottom line, the average EPS estimate is $0.44.
Next year's average estimate for revenue is $452.6 million. The average EPS estimate is $1.95.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 472 members out of 506 rating the stock outperform, and 34 members rating it underperform. Among 96 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 87 give Perfect World a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Perfect World is outperform, with an average price target of $13.45.
Can your portfolio provide you with enough income to last through retirement? You'll need more than Perfect World. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.
- Add Perfect World to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Will ‘Neverwinter’ Be the Xbox One’s Killer App in China?
Will Perfect World’s ‘Neverwinter’ help Microsoft win over Chinese gamers on the Xbox One?
Giant Interactive and Perfect World Follow NetEase Lower
China's online gaming stocks are compelling values here.
Buy This Dividend-Paying Gaming Stock on the Pullback
This gaming stock dropped 10% after earnings, opening up an opportunity to buy on the pullback.